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September 10, 2007

 

DiNapoli: Monroe County Circumvented State Law
& Constitution with $2.5 Million Subsidy to Airtran Airways

New York State Comptroller Thomas P. DiNapoli today criticized an arrangement to use $2.5 million in airport improvement funds to induce low-cost carrier AirTran Airways to the Greater Rochester International Airport. The use of State moneys for these purposes circumvented State law and the State Constitution, according to an audit DiNapoli released today. The audit covered the period of January 2002 to December 2005.

The stated purpose of the grant money was to reimburse the county for airport improvements and reduce local taxpayer debt on the project. Instead, local officials gave the money to AirTran. Local officials allege that this was done with the knowledge and approval of certain State officials.

“The use of State grant moneys for this purpose was at best inappropriate,” said DiNapoli. “Public funding was used as an inducement for a large corporation to set up shop in Monroe County. Economic development is a good thing, but even with the best intentions, you can’t get around the State Constitution. This money was supposed to help taxpayers. And local officials made little effort to inform the public about what they were doing. Good government should be transparent and open.”

Monroe County spent $9.4 million for land acquisition and the construction of an airport transportation operations center. The county was subsequently awarded $2.5 million in aid from the State Economic Development Services Corporation and State Department of Transportation to reimburse the County for airport improvements. Instead, the county assigned the money to the County of Monroe Industrial Development Agency (COMIDA) to provide AirTran a subsidy to guarantee the airline a certain level of income at the airport. Neither the county nor COMIDA have the authority to provide a direct cash subsidy to a private enterprise.

DiNapoli’s audit recommends that Monroe County:

  • avoid making agreements with local industrial development agencies for anything other than appropriate county purposes;
  • not inappropriately divert State aid to an IDA when the money is supposed to be used to reduce debt; and
  • ensure there is transparency and fairness in economic development transactions.

Click here for a copy of the audit

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