New York and its local governments dole out $7 billion a year in tax breaks to businesses, but the money is unevenly dispersed and goes to a small number of businesses, a report today contended.
The report comes as Gov. Andrew Cuomo on Wednesday will announce the third round of economic-development grants for the state’s 10 regions. About $756 million will be awarded to the councils.
The findings Monday from ALIGN, a liberal, labor-backed group based in New York City, is the latest to knock the state’s massive system of providing tax breaks to businesses.
On Tuesday, a panel commissioned by Cuomo will unveil recommendations on how to address the state’s high taxes, focusing particularly on property taxes.
The ALIGN report claimed that the $7 billion in tax breaks go to just 4 percent of businesses in New York and can benefit major retailers. Target, for example, received tax breaks since 2001 to build stores in Monroe County and Mount Vernon.
“We need a New York that works for all of us, where big corporations are responsible for paying their fair share of taxes to support our schools, roads, public transit and the services that we all rely on,” said Tomás Garduño, political director of ALIGN, in a statement.
It claimed that IDAs in the Finger Lakes had the lowest failure rate at 52 percent, meaning that 52 percent of projects that ended in 2011 failed to provide jobs. Central New York IDAs had the highest failure rate at 85 percent.
Economic-development officials knocked the report, saying the data is outdated and doesn’t offer a true reflection of economic conditions.
Brian McMahon, executive director of the state Economic Development Council, said the report looked at projects that may have started prior to 1990.
“Any conclusions will be distorted and not reflective of current IDA activity,” said McMahon, whose group represents the IDAs.
He cited statistics from the state Comptroller’s Office said that showed there were 4,486 active IDA projects in 2011. The projects generated $917 million in new revenue for municipalities and created 217,587 new jobs—a net of $2,575 per job.