New York advocates want state lawmakers to revisit reforms to industrial development agencies next year, including measures aimed at increasing oversight of tax breaks.
The proposals include adding school board members to IDA boards to improve oversight of how school tax dollars are spent, authorizing county comptrollers to audit the boards and prohibiting data centers from receiving IDA tax breaks.
Ron Deutsch, senior policy fellow with Reinvent Albany, said IDAs need to take a closer look at the companies receiving tax abatements.
“They need to go back and make sure these companies are, in fact, creating the number of jobs they say they’re creating, but all of this information is generally self-reported,” Deutsch said.
Deutsch pointed to Niagara County’s IDA, which is giving millions in tax breaks for an Amazon warehouse, as an example.
A state comptroller report found IDAs granted around $2 billion in tax exemptions in 2024. Advocates say those exemptions should be more closely monitored.
While IDAs are designed to further economic growth, other reports show they have cost local governments resources needed to provide public services such as education.
The reform proposals received wide support from lawmakers and labor rights, good government and community groups. The Legislature passed a version of the bill in 2024 to add school board members to IDA boards, but Gov. Kathy Hochul vetoed it. She said experienced IDA board members should not be removed and replaced with inexperienced ones.
Deutsch said IDAs are heavily opposing the transparency reforms.
“The IDAs and their association, New York State Economic Development Council, are adamant they do not want to see school taxes taken out of their toolbox,” Deutsch said. “They think that this would basically neuter the IDA itself.”
A 2024 Good Jobs First-Reinvent Albany report said IDAs make money from fees by abating more taxes. It found one-third of state IDAs received all of their operating funds from transaction fees, while more than two-thirds received 80% of their funding from deal fees in 2021.
Deutsch said the money given to IDAs could be better spent on child care, affordable housing and education, with federal cuts further limiting state funding.
Edwin is a reporter and producer in North Tonawanda, New York. He’s previously reported for the Niagara Gazette and the Ithaca Times. Edwin got an early start in radio interning for WBFO-88.7FM, NPR’s Buffalo affiliate. In 2018, he graduated from SUNY Buffalo State College with a B.A. in Journalism, and in 2022, graduated from Syracuse University with an M.S. in Communications.