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Two IDAs ignore 'but-for test'

Where's Joel Giambra when we need him?

The former Erie County executive regularly railed against doling out tax breaks to companies that failed what he used to call the "but-for test." In other words, a company needed to show that it wouldn't do a project without the tax breaks.

He also typically opposed tax breaks for medical offices, stores and schools that served a customer base that was almost entirely local.

Well, in the last two weeks, industrial development agencies have taken steps to embrace a pair of projects that fail the common-sense, "but-for test."

The Amherst Industrial Development Agency forked over more than $790,000 in tax breaks to Bryant & Stratton College so the for-profit school could move from one side of town to a bigger building on the other.

The IDA approved the aid even though offering incentives for educational services generally is prohibited under the eligibility policy that all of the county's IDAs use.

James J. Allen, the Amherst IDA's executive director, supported the tax breaks, arguing that the $5.9 million project will provide a public benefit, and that Bryant & Stratton's educational programs will help build a better-trained local work force.

Doreen Justinger, a Bryant & Stratton vice president, says the tax breaks will allow the school to bring in new technology that will help it launch new programs and offer other services, like messaging services, for its students.

"Our lease is up," Justinger said. "That space was not working for us. We decided we wanted a more campuslike setting."

Only one IDA board member, Stuart Shapiro, opposed the handouts, noting that Bryant & Stratton officials gave no indication that the project would not proceed without the tax breaks.

In other words, Bryant & Stratton failed the "but-for test," just as it did seven years ago, when the Erie County IDA granted the school $870,000 in tax breaks for its new campus in Orchard Park. Giambra, who served on the IDA board back then, even voted for those tax breaks, only to change his mind a month later and block the aid because he considered Bryant & Stratton a retail business and thus not eligible for incentives.

This time, the Amherst IDA gave Bryant & Stratton's latest project a passing grade. Now you and I -- and every other taxpayer in Erie County -- will have to dip into our own pockets to make up for the $790,000 in local, school and county property taxes that Bryant & Stratton won't be paying on its new campus over the next seven years.

It's a similar story down the road in Lancaster, where the Lancaster IDA next month will consider giving tax breaks to MedFirst Urgent Care, which wants to open its second urgent care facility on Transit Road.

Paul Leone, a consultant to the Lancaster IDA, argues that the project merits consideration for tax breaks because it would provide urgent care medical services that currently aren't available in the Lancaster and Elma area.

I have no doubt folks living in that area would love to have a MedFirst office nearby the next time they need an X-ray or one of their children wakes up screaming with an ear infection on a Sunday morning.

Yet it's still a purely local business, serving a customer base drawn almost entirely from the surrounding towns. A project like that should be able to stand on its own merits, without being shored up by taxpayer money.

Urgent-care facilities, an up-and-coming segment of the health care industry because they offer cheaper service than emergency rooms, have long been a controversial area for IDAs. Mainly because they can't pass the "but-for test."


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