by Jeremy Moule
When Governor Andrew Cuomo proposed a series of reforms for the state's industrial development agencies, IDA representatives and local elected officials protested. The governor essentially wanted to restrict the agencies' ability to grant exemptions on state sales tax, but local officials said that would rob them of a useful economic development incentive.
Well, perhaps predictably, Cuomo's proposal hasn't stuck; lawmakers negotiated a compromise reform package. The State Senate has already passed the budget bill containing the changes and the Assembly will start voting on budget bills today. (The Assembly will probably support the Senate on the IDA compromise).
In his 2013 to 2014 budget proposal, the governor said that the state currently doesn't have input when IDA's award state sales tax exemptions. He proposed limiting the industries that could receive the exemptions; housing and retail would no longer have been eligible. He also wanted the regional economic development councils and the state economic development commissioner to sign off on the exemptions.
The legislation approved by the State Senate is quite different from that proposal: IDA's would still be able to award state sales tax exemptions and no additional approvals would be required. The agencies would have some additional reporting requirements, but they won't face much in the way of restrictions on which industries can receive tax benefits. Some analyses of the legislation say it would prevent IDA's from giving state sales tax exemptions to some retail projects.
IDA representatives and many local elected officials — though not all — are counting the outcome as a victory. But Brighton Supervisor Bill Moehle says he's disappointed that the governor's proposed reforms didn't stick. Brighton officials have, in the past, been critical of the Monroe County IDA, saying it awards tax breaks to inappropriate projects.
"I like the idea of having the state oversight on the sales tax," Moehle says.