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  • Ron Deutsch, executive director of New York for Fiscal Fairness, talks about reform of industrial development agencies during a meeting with the Press-Republican Editorial Board in Plattsburgh. (Staff Photo/Rob Fountain)

    Ron Deutsch

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June 20, 2007

Push on for reform of IDAs

<a href="mailto:jlotemplio@pressrepublican.com">By JOE LOTEMPLIO</a>

PLATTSBURGH — A watchdog for industrial development agencies says the programs are failing in many areas of the state and drastic changes are needed.

“We think IDAs are a worthwhile program, but they are in need of some repair,” Ronald Deutsch, executive director of New Yorkers for Fiscal Fairness, told the Press-Republican Editorial Board recently.

IDAs help recruit businesses to the area basically by offering tax incentives in exchange for job creation.

But Deutsch says too often the companies do not create the number of jobs they say they will as they continue to enjoy tax breaks.

“And sometimes they wind up cutting jobs,” Deutsch said.



DATA CALLED LIMITED

In Clinton County, more than $3.5 million worth of tax breaks is handed out by the IDA each year, according to a study done by Jobs with Justice.

About half of the IDA projects in Clinton, Essex and Franklin counties do not provide enough information about their deals, Deutsch said, which is a common problem.

His group thinks IDAs should be required to provide detailed information about deals they make with companies and make it available to the public upon demand.

“They have notices for public hearings in the legal section, and hardly anybody notices,” Deutsch said.



REFORMS SUGGESTED

The state should also require companies who have agreements with IDAs to give back some of the tax-break benefits they’ve received if they fail to create the specified number of jobs.

Deutsch said companies shouldn’t be allowed to create low-paying jobs if they receive IDA assistance.

“They should be required to pay livable wages or prevailing wages,” Deutsch said.

Companies should also be required to hire local contractors for construction, a practice that is already used in Clinton County.

Deutsch also said the number of IDAs in the state should be reduced to eliminate competition that might create an un-level playing field.

For example, if a company gets tax breaks to create jobs, it might wind up hiring workers from nearby competitors.

“They would be creating jobs, but they would also be taking jobs away from someone else,” Deutsch said.

A community-impact study should be done before an IDA gives out tax breaks to certain companies to see if an un-level playing field will be created.

Deutsch also said IDA boards should feature a member of the local school board since school tax revenue is affected by deals.

“And we think there should be more representation of the community at large.”



ACCOUNTABILITY

Deutsch said his outfit will continue to lobby for reform, as the law regulating IDAs is supposed to sunset at the end of the month.

“It’s a $400 million-a-year program and, any time you are investing that much money you should be getting the best bang for your buck,” he said.

Adore Kurtz, executive director of the County of Clinton IDA and the Champlain IDA, said she agrees with Deutsch that IDAs should be open books.

“Many IDAs may have chosen not to make compliance a high priority, but we have,” Kurtz said.

Kurtz said information about all local IDA projects is easily available on the Web site www.clintoncountyida.com.



JOBS CREATED

The local IDA has also been diligent in keeping tabs on the number of jobs their clients create.

Kurtz said only Champlain Plastics has fallen short of their benchmarks in recent years.

“They anticipated they would create about 100 jobs, and they’ve been in the 90s,” Kurtz said. “It’s not like they said they would create 100 jobs and only created five. They’re close.”

Kurtz noted that the IDA does many civic-facility projects for non-profit organizations, such as CVPH Medical Center, Lake Forest Retirement Home and the ARC.

As far as getting money back from a company that does not meet its job-creation numbers, Kurtz said it would be hard to do that if the company is failing.

“But anyone who is not performing, we can terminate the agreement, and we haven’t had to do that yet,” she said.

Concerning wages at IDA projects, Kurtz said the better the wage, the better the tax abatement.

“We fully believe in transparency and accountability,” she said.



E-mail Joe LoTemplio at:

jlotemplio@pressrepublican.com

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