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During stopover in Batavia, DiNapoli says IDAs should not broadly interpret law on tax breaks for retail

The state law meant to curtail tax breaks by IDAs for retail developments should be defined as narrowly as possible, according to Comptroller Thomas DiNapoli.

If IDAs broadly interpret the law and push through subsidies for projects that should be outside its scope, then reforms may be necessary, DiNapoli said.

"They should certainly interpret it as narrowly as possible," DiNapoli said. "Having not been a Legislator at the time, I can't overly interpret on their behalf the intent. But what I think we'll do with IDAs that are too broadly interpreting that exception is, we'll make recommendations and work with legislators to tighten up that definition, if that seems necessary to curtail the use of IDA incentives for retail."

DiNapoli was in Batavia this afternoon for a meet-and-greet fundraiser hosted by the Genesee County Democrats at Larry's Steakhouse.

Throughout a six-minute conversation with The Batavian, DiNapoli made it clear he doesn't believe IDAs should be, as a general rule, handing out tax incentives to retail projects.

Asked whether retail chains really wouldn't come to a community unless they get tax breaks, DiNapoli said "that probably varies from community to community," but went on to explain the problem, as he sees it, with such IDA incentives.

"The kind of retail projects we've seen in recent years are the kind of projects that in the long term do not promote the kind of job creation and economic development that would really make a lasting difference in a community," DiNapoli said.

"I continue to have very healthy skepticism of the value of such incentives. As we always point out, there is a cost to the communities that isn't fully realized, so it underscores that the kinds of economic development (undertaken) should be of greater significance, more long lasting, have a transformational impact, and retail doesn't really provide that."

In early May, the Genesee County Economic Development Center Board approved $1.8 million in tax incentives for COR Development to remodel the vacant space at Batavia Towne Center formerly occupied by Lowe's Home Improvement.

The package includes a reduction in property taxes and forgiveness of state and local sales taxes on building material and store fixtures.

The state law prohibits IDAs from giving away state sales tax money unless certain findings are made (there is no law that prohibits other tax breaks for retail projects). The potential findings are that the project is in a highly distressed area, is a tourist destination or will provide goods and services not readily available to area residents.

It was on the last exception that the GCEDC board based its decision on. There was no evidence presented at any public meeting to substantiate the finding.

The only known tenant at the time of the vote was Dick's Sporting Goods.

Genesee County has five small retail outlets that sell sporting goods, four of which are locally owned.

Among the arguments put forward by GCEDC CEO Steve Hyde in support of tax breaks for COR is that he needs that Lowe's space filled in order to attract major corporations to projects such as WNY Stamp and the Genesee Valley Agri-Business Park.

"I'm not sure I buy that argument," DiNapoli said. "I'm not in a position to judge that, but that argument is a stretch."

DiNapoli acknowledged that interpretation of the law is largely left up to the local IDAs.

"Even the report we put out every year (on IDAs in NYS), even that is limited by the fact that it's self-reported information," DiNapoli said. "As people have pointed out, IDAs, as well as other authorities in New York, tend to operate with a level of autonomy that I think doesn't provide a maximum opportunity for accountability.

"As you point out," he added, "there are certain exceptions and there certainly there isn't any easy way to clamp down on an IDA that might be too generous in interpreting that exception."

Dave Olsen
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"As people have pointed out, IDAs, as well as other authorities in New York, tend to operate with a level of autonomy that I think doesn't provide a maximum opportunity for accountability."
That is a huge problem, he's right about that. 94% of NYS debt is incurred by these un-elected authorities without voter approval and are full of patronage jobs.

http://www.osc.state.ny.us/pubauth/

Ed Hartgrove
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DiNapoli acknowledged that interpretation of the law is largely left up to the local IDAs.

"Bawk!, Bawk! Hey, Chicken Little. Who's on guard duty tonight?"

"Baw-aw-aw-k! I got the short straw. It's Billy Fox! He's comin' over for dinner at eight. Baw-aw-aw-k!"

What a SCAM!!

Ed Hartgrove
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Nice teeth, though, Mr DiNapoli.

Jim Rosenbeck
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Nice work on this story Howard.

Robert Brown
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"...But what I think we'll do with IDAs that are too broadly interpreting that exception is, we'll make recommendations and work with legislators to tighten up that definition, if that seems necessary to curtail the use of IDA incentives for retail."

Lots of wells, maybes, ifs, etc...

How about stating something like we all know the problem and within the next 90 days we'll put an end to the broad definitions and the inherent abuse of the system.

Step away from the microphone and do something!

John Roach
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Ed, this is not new. The Comptroller's office issued a report before that said it was up to the local legislatures to reform the local IDA's.

Lorie Longhany
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The Comptrollers office runs audits and makes recommendations. It then recommends in a report how an authority, school district, municipality, etc can make corrections. When something is uncovered that may be against the law, it is sent to law enforcement -- i.e. local DA's office (as was the case in the ABO report on the local IDA when they paid a bonus to a contractor), US Attorney or the FBI.

This office does not legislate nor is it law enforcement.

bud prevost
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"This office does not legislate nor is it law enforcement."

Then why should I give rats behind what they have to say? The more I pay attention to NY politics, the more frustrated I become. I went out on a limb, voting for Andrew Cuomo. I really believed he wanted to downsize our government, eliminating all these unaccountable authorities, and consolidating local government functions. You know what? He's pissing gas on to the already burning bonfire.

JoAnne Rock
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Mr. DiNapoli is one of the good guys. His office (Comptroller) is the only one that is providing any real oversight and transparency on public authorities.

“Public authorities are an increasingly influential sphere of government, but they still operate in the shadows with too little accountability to the public. The Public Authorities Reform Act of 2009 made some progress in improving oversight but more needs to be done to curb the state’s overreliance on public authorities issuing debt without voter approval.” - Thomas DiNapoli

His latest report highlights his concern that public authority debt has grown to 250 Billion.

http://www.scribd.com/doc/128669038/Public-Authorities-Btn-2013

In April, he released an analysis of Gov. Cuomo’s budget proposal that found it would expand the issuance of debt through public authorities through a new bond financing program that’s supported by sales tax revenue.

http://www.scribd.com/doc/125313840/Review-of-Executive-Budget

Good article Howard, you got a lot in for a 6 minute interview.

My question for Mr. DiNapoli would be, Do you think that public authorities are becoming "too big to fail"?

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