The five municipal industrial development agencies in Erie County have banded together in what any rational observer has to hope is a vain attempt to preserve their detrimental influence. This is a time to reform the operation of IDAs, not protect them.
As a recent Buffalo News story showed, IDAs in Amherst, Clarence, Concord, Hamburg and Lancaster are generous with county taxpayers' dollars, even when the businesses they support produce few jobs or when, instead of creating new jobs, they merely pilfer them from a different Erie County municipality. Why should taxpayers be on the hook for that?
That's the question that Erie County Executive Mark C. Poloncarz is asking, and it's one for which taxpayers should demand answers.
Here are some of the deals made on the backs of Erie County taxpayers by local IDAs:
The Amherst IDA provided an estimated $584,590 in tax breaks to Premier Wine and Spirits, which was moving to Amherst from Tonawanda. About 10 new jobs were created.
The Lancaster IDA provided about $59,770 in tax breaks to the Olive Tree Family Restaurant to expand its existing restaurant, creating 10 new full-time jobs.
The Concord IDA gave $50,150 in tax breaks for the Spring Creek Athletic Club to move to a larger building. Four new full-time jobs and eight part-time jobs were created.
In all, according to a Buffalo News analysis, 90 projects have been approved since 2010.
More than $324 million in incentives was provided, and while the projects brought millions of dollars in new money to community tax rolls, at least a third of them generated fewer than five new full-time jobs. What is more, 41 percent of the projects were in the retail sector, which is not considered a major economic generator and which, by definition, is not the kind of project an industrial development agency should be subsidizing.
This is the wasteful, anything-goes system that local officials are trying to preserve. It vests in local hands decisions that affect all Erie County taxpayers, sometimes at the expense of others. Tax breaks given to businesses have to be made up by the remaining taxpayers. These aren't free.
Lancaster Supervisor Dino Fudoli accuses Poloncarz and Assemblyman Sean Ryan, D-Buffalo, of seeking to benefit their union supporters by limiting the power of local IDAs. Poloncarz denies the allegation, but the critical point is that even if it were true, it is irrelevant.
Whatever any politician's motivations might or might not be, they wouldn't change the underlying fact that local IDAs are of no real value to an area that should be controlling the distribution of tax breaks, not handing them out like candy.
Poloncarz and the entire state delegation need to push for reasonable reform of industrial development agencies. Not just Erie, but all of the state's counties need a rational, controlled system of incentivizing development, one that weighs costs and benefits before picking the pockets of taxpayers.