New York State Bans Using Tax Breaks For Retail Projects

6:26 PM, Apr 1, 2013   |    comments
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Buffalo, N.Y. - Over the last few years, it seemed like all local businesses had to do was ask for tax breaks to expand in the area and town Industrial Development Agencies would say yes.

$600,000 in subsidies to Premier Liquor to move from Tonawanda to Amherst? Done.

$85,000 in tax breaks to Towne Mini Cooper to expand across the street in Clarence? Done.

Even a donut shop got an $8,000 tax incentive from Clarence.

Last year 2 On Your Side looked into five of these tax incentive deals and found that town Industrial Development Agencies had given out $1.25 million in tax breaks to create just 57 new jobs.

Now as part of the state budget deal, the development agencies for the most part will not be able to give out tax breaks to retail businesses.

County Executive Poloncarz has been pushing the state to rein in the local development agencies.

County Executive Poloncarz: "The auto dealership, the Mini Cooper, they were going to do the deal regardless because they wanted to do that, same thing with Paula's Donuts, same thing with Premier Liquor, we should not be giving them tax breaks, rewarding them for things that they're going to do otherwise."

The local development agencies get a one percent fee for every one of these deals that they do, that's how they're funded.

Last year for instance, the Amherst IDA had a budget of $750,000 and its Executive Director made $172,000.

Poloncarz and Assemblyman Sean Ryan have charged that often times the development agencies do deals just to generate the one percent fee so they can stay in business.

Amherst Supervisor Dr. Barry Weinstein, concerned about the Amherst IDA deals, got himself appointed to the IDA board a little over a year ago.

His feeling about ending tax breaks for retail projects, "I think it's a great idea," he said.

Recently for instance, Weinstein voted against giving a new hotel project in town $1.4 million in tax breaks. The deal was approved in a 4-3 vote.

"I think the project would have been done anyway, I didn't think the subsidy was necessary," said Weinstein.

Now under the changes in state law, hotel projects, and other retail businesses, will no longer be eligible for tax breaks.

There are a few exceptions to the ban:

* If the business is considered a tourism destination.

* If it's located in a "highly distressed" area.

* If the product that's being produced is not "reasonably accessible" in the area.




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