IDA-Issued Tax Breaks in NY Continue to Rise
John Jordan | May 30, 2019
ALBANY—New York’s Industrial Development Agencies provided a total of $751 million in net tax exemptions for local economic development projects in 2017, an increase of more than 5% from the previous year, according to a report issued on May 29 by New York State Comptroller Thomas P. DiNapoli.
The Mid-Hudson ($175 million) and Long Island ($153 million) regions had the highest net tax exemptions in 2017, according to the report.
The gap in net job gains created by IDA-sponsored projects narrowed between upstate and downstate regions in 2017, according to the most recent data submitted by the state’s 109 active IDAs. Through 2017, downstate areas accounted for 51% of the nearly 200,000 total net jobs gained through IDA projects versus 49% gained in upstate regions. In 2016, downstate outpaced the rest of the state with 57% of the total.
“The need for close scrutiny of economic development efforts has never been higher,” said DiNapoli. “My office releases IDA data so New Yorkers can examine if incentives given out to create and retain jobs in their communities are worth it.”
The annual report showed IDAs provided approximately $1.4 billion in total tax exemptions to 4,385 projects in 2017. These exemptions were partially offset by $642 million in payments in lieu of taxes (PILOTs). Both total exemptions and PILOTs increased, resulting in net exemptions of just over $750 million—$36 million (5.1%) higher than the prior year. In 2016, net tax exemptions were up $20 million, nearly 3%, from the previous year.
Through 2017, active IDA projects produced a net total of 198,522 jobs gained since their inception, with nearly two-thirds (2,912) of projects resulting in net jobs gained. Services, such as retail, health care and recreation, accounted for 50,435, or 25%, of the total net jobs gained, closely followed by manufacturing (21%), and finance, insurance and real estate (20%).
Outside of New York City, IDAs in 2017 reported:
• All seven upstate regions had net job gains over the life of their active projects, with the Capital District adding the most (22,987). Long Island led the downstate regions with nearly 47,000 jobs created;
• Long Island continues to lead the state in net job gains, once again accounting for approximately 24% of the statewide total;
• For the second straight year, the Long Island (809), Finger Lakes (742) and Western New York (720) regions had the largest number of projects;
• The Mohawk Valley ($24 million) and North Country ($7 million) regions had the lowest net tax exemptions; and
• The Capital District ($76) and Mid-Hudson ($75) regions had the highest net tax exemptions per capita.
Editor, Real Estate In-Depth