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Editorial: Long Island should have one voice for economic development

Suffolk County offered hundreds of thousands of dollars

Suffolk County offered hundreds of thousands of dollars in tax breaks to a European pastry maker, Pidy, to relocate to Central Islip from Inwood. (Nov. 22, 2013) Credit: Danielle Finkelstein

The Suffolk County Industrial Development Agency has put together a string of apparent wins lately, but they're somewhat empty. That's because in many cases the jobs and businesses being lured to the county are coming from Nassau, and the tax breaks being granted those businesses may be unjustifiably high.

Take ClickIt Inc., a developer of video security systems. Last month the Suffolk County IDA announced it had granted the company $184,000 in tax breaks over 10 years to move to Hauppauge . . . from Bethpage. The company, with 23 employees, says it will build a $2.8-million headquarters and hire at least 12 local workers in the next two years in exchange for the breaks. The savings will come from a lower property tax bill, a sales-tax exemption for materials to equip the building and a break on the mortgage recording tax.

ClickIt was not an exception. In December, Chemicolloid Labs Inc., a machinery manufacturer, announced it would move from New Hyde Park to Hauppauge, bringing eight jobs and promising to add five more by 2016, in exchange for $131,000 in Suffolk IDA tax breaks over 10 years. In November, the IDA offered Pidy Inc., a pastry firm, $657,000 over 12 years to move its 60 jobs to Central Islip from Inwood.

In each case, a local company claimed to be seriously weighing leaving New York. That's always an option, because states where taxes and other costs are lower and economic development officials are eager to grant tax rebates and other incentives. These offers are constant, and a real concern for those charged with keeping jobs on Long Island.

The danger, though, is that even a company that intends to stay on Long Island can use such offers to manipulate tax breaks from industrial development agencies. Is this cross-county competition really economic development, and is it worth what IDAs trade?

Experts on both economic development and Long Island itself seem to agree that such "cannibalistic" moves, which can cost local governments and school districts plenty, don't make the economic pie here any bigger, and thus don't do much good.

Anthony Manetta, who heads the Suffolk County IDA, says his organization is showing the kind of aggressiveness needed to keep jobs on the Island. It's certainly true that the flight of companies and jobs from the region must be fought, but if that means different parts of the Island offering ever-larger breaks to companies already here, tax revenue will be lost and little will be gained.

Long Island has eight separate IDAs: the two county operations, one in Glen Cove, and town IDAs in Islip, Babylon, Brookhaven, Riverhead and Hempstead. With competition fierce among these entities, the region does not have the approach it needs to make deals that will promote economic growth (or fight economic decline) at a reasonable cost. The best way to allocate tax breaks to buttress the economy, and make rational decisions about when tax breaks are warranted, would be through an Island-wide IDA, served and overseen by representatives from across the region.

On Thursday, both the Nassau and Suffolk county IDAs will hold separate annual meetings. The Island would be better served if it were just one meeting of just one agency.