Following an outcry over the Green Acres Mall’s tax breaks, the state Senate unanimously this week passed a bill that would require businesses that receive payments-in-lieu-of-taxes from industrial development agencies to notify local governments and school districts of their intents to grieve their tax assessments.
IDAs across the state grant tax incentives — such as payments-in-lieu-of-taxes, or PILOTs — to businesses to spur economic development and job creation. PILOT payments sometimes begin at the property’s current taxes and the payments can be frozen at that level for several years and then are gradually increased. IDA officials may also take into account pending tax grievance cases and use a lower number than the current taxes in anticipation of the case being resolved in favor of the business.
For the Green Acres Mall in Valley Stream in 2014, the Hempstead Town IDA used a tax level lower than the mall’s then-taxes for a PILOT because of a tax grievance case — which remains pending. Taxpayers and local elected officials blamed the PILOT and the lower PILOT payments for tax increases in their school property taxes in 2016, which turned out to be largely due to school budgeting practices.
The Senate’s bill would require the businesses that receive PILOTs to alert local governments and school districts — who receive portions of PILOT payments — to their intentions to grieve their taxes. The notifications must be made in writing 30 days before filing a grievance.
“It gives them a chance to plan ahead,” said Sen. Carl Marcellino (R-Syosset), a sponsor of the bill.
Sen. Todd Kaminsky (D-Long Beach), another sponsor of the bill, said, “Long Island has begun to wake up” to IDAs and PILOTs after furor following Green Acres and other controversial tax incentive plans. He said he hopes this bill is only the beginning of IDA reform from the state Legislature.
“This is really a notice bill,” he said. “I certainly think this is a very harmless rule that should be instituted.”
The state Assembly’s version is currently in the Real Property Taxation Committee and has not been scheduled for a vote. The sponsor, Assemb. William Magnarelli (D-Syracuse), could not be reached for comment on Wednesday.
The Senate has passed the bill during three other legislative sessions.