DiNapoli IDA Report: Cost to Create Jobs Increases,
While Actual Jobs Declined
Report Includes Breakdown of Each IDA, Audio Available
Industrial Development Agencies (IDAs) reported 4,130 projects in 2007 compared to 3,813 projects in 2006, yet the total number of jobs created declined by more than 2,000 jobs and the cost to create a job increased from $4,195 in 2006 to $4,527 in 2007, according to an annual report examining the performance of IDAs released today by State Comptroller Thomas P. DiNapoli.
This is the second annual report released by DiNapoli looking at the performance of the state’s 115 IDAs. Last year’s report found data reported by IDAs was inconsistent and incomplete, making it difficult to determine the number of jobs created and the cost to taxpayers. As a result, DiNapoli announced that his office would increase oversight of IDAs and would suspend IDAs from offering state tax exemptions if they failed to meet reporting requirements. In 2008, DiNapoli suspended nine IDAs.
“For too long, it was hard to tell whether IDAs were a good deal for taxpayers,” DiNapoli said. “Information was hard to find, and the little information available was unreliable. The new reporting requirements pushed by my office are giving a clearer picture of what IDAs are doing with taxpayer dollars. IDAs that failed to report faced serious consequences and my office has suspended some of their benefits. But more needs to be done to increase transparency and accountability, and to measure the value of IDAs.
“Costs are up, borrowing is up but the number of jobs is down. We need to evaluate the effectiveness of IDAs to make sure taxpayers are getting the right bang for their IDA bucks.”
By law, IDAs are required to file annual audited financial reports with the Comptroller’s office, with information such as the number of jobs created or retained and the amount of tax exemptions authorized. IDA data is self-reported and is reviewed but not audited by the Comptroller. If an IDA fails to report, the Comptroller can suspend an IDA’s ability to offer state tax exemptions until the report is filed.
In 2008, DiNapoli suspended nine IDAs. They include: Town of Erwin IDA, Village of Groton IDA, City of Newburgh IDA, Town of North Greenbush IDA and City of Oneida IDA. Four IDAs whose authority to offer state tax exemptions were initially suspended have since filed their reports: Town of Islip IDA, Village of Sidney IDA, Town of Wallkill IDA and Town of Southeast.
Other findings of the report include:
- Total Project Amounts Increased: In 2007, IDAs reported 4,130 projects worth nearly $61 billion, an increase of 48 percent from the 3,813 projects totaling $41 billion reported in 2006.
- Total Jobs Down, Cost Per Job Up: Total estimated job gains in 2007 were 226,602 compared to 228,925 in 2006. The average cost per job for IDAs increased from $4,195 in 2006 to $4,527 in 2007, an increase of nearly 8 percent. DiNapoli noted that job figures are often based solely on estimates made by the IDAs, and not independently verified -- a problem noted in prior Comptroller audits.
- Total Tax Exemptions Increased: Of the nearly $970 million in total tax exemptions reported in 2007, exemptions from property taxes accounted for $652 million, or 67.2 percent. Exemptions from state ($87 million) and local ($91 million) sales taxes and mortgage recording taxes ($140 million) accounted for the remaining 32.8 percent. These exemptions were offset by payments-lieu-of-taxes (PILOTs) totaling $377 million in 2007 compared to $333 million in 2006.
- Debt Increased: Outstanding debt increased to $22 billion in 2007, an increase of $2.5 billion from $19.5 billion in 2006. Nearly half of this debt -- $10 billion -- was issued by the New York City IDA.
- Industries Supported: Manufacturing and service industries make up the bulk of the projects supported by IDAs, representing approximately 56 percent of all projects in 2007 (the same percentage as in 2006).
- Average Support: The average IDA supported $590 million in projects. Thirty-three IDAs reported fewer than 10 projects in 2007, three IDAs reported just a single project and three IDAs reported no active projects.
In 2003, the Comptroller’s office undertook efforts to improve the accuracy and quality of the data reported by IDAs, and collaborated with the Authority Budget Office to develop a comprehensive online reporting system called the Public Authorities Reporting Information System (PARIS) that was implemented in November 2007. This is the first year that IDAs have reported their data in PARIS. DiNapoli noted that changes have been made in PARIS to make it easier to evaluate job creation goals, clawback provisions and other information.
IDAs are independent public authorities that offer real property tax, sales and mortgage recording tax exemptions, and low interest rate bonds to attract, retain and expand businesses. There are currently 115 active IDAs.
Click here for a copy of the IDA report.
Click here for DiNapoli's audio feed.