North Country not the worst region in the state for taxpayer-funded tax breaks for business, report says
Wednesday, December 11, 2013 - 2:42 pm

The North Country does not fare badly in comparison to the other regions in the state in the expense of taxpayer business development programs being criticized in a new report.

As Gov. Andrew Cuomo is about to unveil the third round of competitive grant funding for the North Country Regional Economic Development Council and similar councils around the state, business development programs of tax breaks in the state are being criticized in the report.

The Alliance for Greater New York (ALIGN), described as a liberal think tank, has compiled a report with the Getting Our Money’s Worth Coalition describing shortcomings in the various development programs in the state in advance of today’s announcements of the latest round of regional economic development grant awards.

The report cites a lack of informative reports from the assortment of development agencies and a failure to meet job creation goals agreed to, often in exchange for tax breaks for business.

The North Country ranks 10th among the 10 regions in IDA tax exemptions, 9th in Empire State Development Corporation, 8th in Empire Zone tax credits, 9th in Regional Economic Development Council awards, 10th in Excelsior Jobs Program tax credits, tied for last in Brownfield Tax Credits, and 3rd in LDC grants. On average, it ranks 8th in spending among all programs.

But the North Country also has the fewest subsidized projects from the seven programs covered in the report, with only 1,537, compared to first-ranked Western New York with 3,861 projects.

In a summary of the report, ALIGN said “Subsidy spending is largely uncoordinated, with Regional Councils only coordinating around 6% of the $7 billion spent each year in New York on corporate tax subsidies. Big businesses take advantage of multiple, uncoordinated subsidy programs the most.

“Only a tiny fraction of New York’s businesses are accessing economic development subsidies; 96% of businesses are shouldering the tax burden for the 4%,” the summary said.

The North Country region is defined in the regional council format as including St. Lawrence Jefferson, Lewis, Franklin, Essex, Clinton, and Hamilton counties.

A North Country “snapshot” in the report describes the development of an extension of St. Lawrence Gas Company’s expansion from St. Lawrence County into Franklin County as one of the most expensive North Country projects through the Empire State Development Corporation, and, among Empire Zone subsidy programs, the breaks given to Brookfield Renewable Energy subsidiary Erie Boulevard Hydropower LLC through Potsdam’s Empire Zone and subsidies to St. Lawrence Zinc in Gouverneur as among the most expensive programs in the North Country.

“We need a New York that works for all of us, where big corporations are responsible for paying their fair share of taxes to support our schools, roads, public transit and the services that we all rely on,” said Tomás Garduño, Political Director of ALIGN.

“Most economic development programs do not report in great enough detail to assess performance,” the report said. “Industrial Development Agencies (IDAs) are an exception, where an analysis of job creation performance found significant failures. The most recent IDA data shows that 33% of net spending resulted in no job promise, no job creation or a loss of jobs, meaning that if IDAs are any indication of the overall performance of New York’s economic development system, we can assume that approximately $2.3 billion is wasted each year. Overall, 72% of IDA projects lost jobs, failed to create jobs, or had no job promises. The Finger Lakes had the lowest failure rate, at 52%, while 85% of Central NY IDA projects failed.”