Reprinted from Post Journal 2/26/10
The state has made a "money grab" to try to close its budget deficit, billing local Industrial Development Agencies for thousands of dollars.
On Thursday, IDA Director Bill Daly explained the situation during a board of directors meeting. The Chautauqua County IDA is expected to pay $90,363 to the state, a 4.7 percent tax on the agency's 2008 revenues.
Calling the decision to bill IDAs "unconscionable," Daly said a number of agencies are mounting opposition to the tax assessment. Initially, Daly said he thought the $90,000 number was a mistake, an extra zero added onto a bill of $9,363 - a much smaller amount he still would have been upset to pay.
The number was no mistake though, and no joke either.
The law used to bill IDAs is labeled a "recovery of state governmental costs from IDAs." It was signed into law by Governor David Paterson on April 7 of last year, effective since April 1, 2009. The law allows for the state to recoup up to $5 million annually in administrative costs from IDAs.
When bills began to arrive earlier this month, it quickly became apparent to IDAs that the state was going after the full amount allowable under the law.
In existence primarily to aid in the creation and retention of jobs for New York's residents, local Industrial Development Agencies work to create better business atmospheres which generate new economic activity and revenue producers.
Citing the fact that the bills were received by local IDAs long after their current budgets had been developed and implemented, the County Legislature unanimously passed a resolution in opposition to the tax assessment Wednesday.
In its resolution of opposition, the legislature called upon the governor and the state legislature to repeal the assessment - which it said will take away local resources that could be better used to "create jobs in our communities in this time of economic crisis."
The bills are to be paid by March 31.
Echoing the legislature's resolution, Daly said one problem with the tax assessment is that nobody was expecting it.
Additionally, the 4.7 percent tax on revenues from 2008 includes all different types of the IDA's budget lines - from county money given to the IDA for promotion of the county to loan money repaid to the IDA by borrowers.
"They're taxing the Al Tech loan repayments," Daly said. "It's out of control. We've got a great CFO and we do our budgeting the right way. All our budgets are on one spreadsheet, the way we were told to do it. In there is the money the county gives us to promote the county as well as money for the Small Businesses Development Center."
In its resolution, the legislature directed the county's Department of Planning and Economic Development to document the negative impacts of the new assessment on the county as well as its economic development efforts. Copies of the resolution were authorized to be sent not only to Paterson and the leadership in the state legislature, but local officials such as State Senator Cathy Young and Assemblyman Bill Parment as well.
By Nicholas L. Dean
