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Erie County IDA blocks local tax scofflaws from tax breaks

Companies that aren’t paying their taxes need not apply for tax breaks from the Erie County Industrial Development Agency.

The IDA on Wednesday approved a new policy blocking incentives to any business that is behind on its tax payments within Erie County.

“We need to send a message that, if you want to receive a tax break from this community, then you should pay your taxes,” said County Executive Mark C. Poloncarz, who was the driving force behind the new policy. “If you’re not paying your taxes, you should not be rewarded by this community with tax breaks on another project.”

The policy almost wasn’t approved. It initially fell one vote shy of the 10 votes needed for approval, but board member James Doherty, who initially was one of two board members to oppose the policy, quickly changed his vote to support it. The final tally was 10-1, with Amherst Supervisor Dr. Barry Weinstein casting the only vote against the policy.

Doherty initially opposed the policy because it included any business or property where the applying company’s principal owners held at least a 25 percent ownership stake. Doherty thought that provision was too stringent.

But when the initial vote had only nine votes in favor of the policy, which would have meant it failed to pass, he changed his vote.

“I don’t agree with the 25 percent,” he said, “but I don’t want to hold it up.”

The policy applies only to businesses and property within Erie County, although it also contains a provision that would allow it to cover holdings in other counties and municipalities where the IDA serving that area also has adopted a similar policy.

Erie County is the only IDA in the state to approve a tax scofflaw policy, so for now it only applies to Erie County.

Poloncarz had pushed for the policy to cover all of upstate New York, but was unable to convince the agency’s directors to agree to a more expansive scope. He cited the proposed Seneca Mall redevelopment project proposed by Syracuse developer Scott R. Congel, who also owes millions of dollars in back taxes on a Rochester mall development project.

“This is not a hypothetical,” he said. “There are developers, corporations and entities that choose not to pay taxes on properties,” he said.

The policy also gives companies that owe taxes the opportunity to explain why they are behind in their payments.

The tax scofflaw policy is the latest in a series of measures adopted this year by the Erie County IDA that have yet to be approved by any of the other suburban IDAs in the county.

The Erie County IDA earlier this year approved a policy that will subject companies receiving tax breaks to random audits to determine whether they are following federal and state equal pay rules. Supporters of the pay equity policy noted that women earn, on average, just 77 percent of what men are paid for similar work.

“The burden of audits is nothing compared with a single mom raising her family on 77 cents on the dollar,” said Franchelle Hart, the executive director of Open Buffalo, a community group that held a rally that drew about 35 people in support of the pay equity policy outside the IDA offices on Wednesday morning.

The policy changes are creating wider gaps in the countywide eligibility policy that Erie County’s six IDAs have followed for more than a dozen years, increasing the chances that businesses and developers could select the location of a project based on differences in tax incentive policies.

“Even if you do end up losing a business, it’s the responsible thing to do,” said Buffalo Common Council President Rev. Darius G. Pridgen, an IDA board member.