Cuomo eyes new IDA tax-break limits

Some feel Gov. Andrew M. Cuomo is usurping Some feel Gov. Andrew M. Cuomo is usurping local control over projects; the Walt Whitman mall received $3 million in tax breaks from Suffolk IDA. (July 11, 2012) Photo Credit: Newsday / Audrey C. Tiernan

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Local industrial development agencies, which provide tax breaks to expanding businesses, would face new limits under a plan unveiled Tuesday by Gov. Andrew M. Cuomo.

In his 2013-14 budget proposal, Cuomo said IDAs are in need of "reform" because they "use state resources for economic development purposes without consulting with the state or receiving input from the regional economic development councils," which he established in 2011.

If IDAs want to continue providing companies with an exemption from the state's 4 percent sales tax, the governor said, IDA projects should be endorsed by the councils.

He also suggested limiting the types of businesses that IDAs can help, and confining projects to scientific research and development, computer software development, agriculture, back-office operations, distribution centers, data centers for financial service companies and manufacturing.

Cuomo's plan would again bar retailers from receiving IDA help. An earlier state prohibition, from 1993 to 2008, expired because lawmakers couldn't agree on extending it.

Recently, the Suffolk County IDA gave $3 million in tax breaks to the Walt Whitman mall in Huntington Station. There are eight IDAs on Long Island.

Cuomo's embrace of IDA reform comes after years of disagreement between the State Senate and Assembly on the topic. By wrapping his initiative into the 2013-14 budget negotiations, experts said, Cuomo increases the likelihood of passage.

Some IDA advocates accused the governor of attempting to "usurp" local control over building projects.

Jim Morgo, former chairman of the Suffolk IDA, said there should be cooperation between IDAs and the state, as there is on Long Island, but not at the expense of "grassroots input." He said, "I don't like the state being able to overrule the decision of the local IDA."

Brian McMahon, director of the state Economic Development Council, which represents IDAs, said Cuomo's proposal could discourage business expansions by "slowing down" the approval process for aid.

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