IDAs retain right to give out state tax breaks in budget win
New York's numerous economic development bodies will still have the ability to give out state-level tax breaks in a deal struck with Gov. Andrew Cuomo in state budget negotiations.
It's a win for the roughly 115 industrial development agencies, or IDAs, around state, that claimed shifting oversight of state sales tax exemptions to the Regional Economic Development Councils would slow down the development process.
Cuomo argued in his proposed budget that the change would improve economic development and save the state upwards of $14 million a year.
The power shift was removed from the state budget this week under a compromise between lawmakers and the IDAs.
Replacing the regional council oversight will be a return of a ban on giving tax exemptions to most retail projects, according to Brian McMahon, executive director of the New York State Economic Development Council, a group representing IDAs.
"We think this is good outcome," McMahon said. "We think it will actually save the state more money in sales tax abatements than they had budgeted for the governor’s proposal."
Exemptions for retail projects will still be allowed at tourist destinations and in severely economically depressed areas.
"The outcome will, I think, address many of the concerns I think the governor was interested in addressing," McMahon added. "And I think it will do so in a way that will continue to be supportive of local economic development."
Industrial development agencies aim to increase economic development and job growth through offering companies incentives, like property and sales tax breaks. A report from the State Authorities Budget Office released this month found IDAs gave out $5.6 billion in tax breaks from 2008-11.