New York comptroller exposes IDA racketLate last year, New York's attorney general concluded that regional economic development and industrial development (EDCs and IDAs) slush funds were rife with the potential for seal-dealing, nepotism, improper loans and exorbitant expenses.
These taxpayer-supported rackets do government business but have little oversight and are exempt from being audited by the state comptroller's office. To say nothing of the massive redundancies of similar overlapping agencies. I've opined many times that a sober and thorough cost-benefit analysis would show this.
So it's little surprise that the comptroller has recently concluded that IDAs are a huge waste of money. Comptroller Tom DiNapoli said more than 4,000 businesses received the tax breaks, but that IDAs realized 22,000 fewer jobs last year than the year before while using the economic development tool. "Taxpayers are not getting enough bang for their buck when it comes to IDAs,"DiNapoli said, according to the Associated Press.
The comptroller noted that the cost of the average IDA-secured job increased 9 percent from 2010 to 2011.
DiNapoli proposed a bill that would allow taxpayers to better analyze the effectiveness of IDAs and their tax breaks. His bill would require clearly described job goals when a tax break is provided, followed by an accounting when the tax break expires. If the jobs promised weren't created, local governments would have a "claw back" provision to extract the avoided taxes from the company.
DiNapoli's proposal would also require annual reports from IDAs and a report card on projects and their job success.
Update: The Innovation Trail public radio project has a great piece on the lack of transparency in IDAs and its consequences.