ALBANY — After decades of controversy and scandal in some local economic development agencies that trade tax breaks for promises of jobs, state Comptroller Thomas DiNapoli said Tuesday it’s time to make employers more accountable for their benefits.
DiNapoli’s latest annual report shows little connection between the tax breaks provided by the county, city and town agencies to employers on the promise of retaining and growing jobs. The cost of the taxes avoided by those selected companies, some with strong political connections, is picked up by other taxpayers.
“We do think the next step is the ‘clawback provision,'” DiNapoli said in an interview Tuesday. His proposal would force companies that fail to deliver on job promises to compensate local and state governments and school districts for the taxes they avoided under the deal.
The breaks can involve exemptions from sales tax, property and mortgage recording taxes and allow low-interest borrowing. There are 115 industrial development agencies and local development corporations in the state, as of the 2009 count, including 40 in New York City, 21 in Erie County, 19 in Westchester County and 14 in Orange County.
DiNapoli said they support 4,577 projects with nearly $500 million in tax breaks that are supposed to result in 204,000 more jobs.
“Some work better than others and some are more forthcoming, but there still needs to be accountability,” DiNapoli said. He said much of the data used to determine whether a company fulfilled its obligation is reported by the company.
DiNapoli wants greater transparency from the local agencies run by politically appointed boards, an end to overlapping jurisdictions and a guarantee that the tax breaks are worthwhile.
He said Gov. Andrew Cuomo’s plan for regional economic development councils to operate state job growth programs could help make local development agencies more efficient and accountable.