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44° Good Morning

Long Island’s tax-break boondoggle

Residents attend a meeting in October 2016 to

Residents attend a meeting in October 2016 to object to tax breaks given to the Green Acres Mall in Valley Stream by the Hempstead Industrial Development Agency. Credit: Steven Sunshine

Time and again, Long Island’s industrial development agencies have shown they’re dysfunctional and fragmented, at times giving tax breaks to meaningless projects that neither create jobs nor bring significant change to the region. Time and again, the lack of oversight, standards and enforcement produces a system that rewards businesses and developers while hurting local taxpayers.

Recent attempts to provide tax breaks for the Green Acres Mall and for luxury apartments on Long Beach’s “superblock” are among more egregious examples. A recent report from the nonpartisan Citizens Budget Commission provided a commendable analysis of the problems, although some of its recommendations might not be the right solutions.

There are 107 IDAs across New York State, eight on Long Island. Together, the report showed, they distribute hundreds of millions of dollars in tax breaks each year. Often, it’s hard for the public to know whether a developer needed and deserved a perks package, or whether companies really had to have the breaks to stay on Long Island, or whether companies will create the jobs they promise. Often, an IDA says yes — to a self-storage facility, an apartment building overlooking the ocean, an auto dealership, a gym, or a mall, finding ways around the state’s standards — even when projects aren’t regionally significant. Then there are times when they pillage from each other, absurdly paying a company to move from one county or town to the next.

In its report, the commission also noted concerns with local development corporations, or LDCs, private, not-for-profit corporations that, like IDAs, buy or sell property, issue debt and borrow money. Long Island has 15 LDCs, and they, too, need reform, including giving the state comptroller the authority to audit them.

Two years ago, state lawmakers passed legislation to improve IDA accountability. But more change must come. That starts with consolidating the IDAs, perhaps into one per county, and creating regional standards and limitations to guide decisions. That would mean tying approvals to established economic development goals for the region and increasing agency coordination. Applicants would have to show how their projects reflect regional priorities, and commit, in writing, to specific job creation and economic impact promises. Such changes would require state legislation and enforcement.

The commission report didn’t address IDA funding, but it should have. The idea that the agencies depend on fees from the very businesses they reward with breaks and grants is part of the problem.

No change will work without more oversight, repercussions and enforcement power. Penalties, fines and clawbacks must be stronger. And the political patronage in the IDAs must end. Then there’s the need for a far more open process. Applicants should engage the community, and the agencies should provide more detailed and accessible records. That includes a searchable public database of every project, with a rationale for approval, what the company or developer received, commitments made, and whether applicants did what they said they’d do.

Only then can the agencies that decide who doesn’t have to pay taxes be accountable to the rest of us who do.