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Press Release: Schimminger Bill to Repeal "IDA Tax"

March 4, 2010


Hon. William T. Stachowski (sent to all members of the WNY state delegation)
New York State Senate
918 Legislative Office Bldg.
Albany, NY 12247

Dear Senator Stachowski:

On behalf of the 2,500 employer members of the Buffalo Niagara Partnership, I applaud your sponsorship of S.6962, the Upstate-Long Island Caucus’s bill to repeal the recovery of governmental costs from industrial development agencies (IDAs). This punitive tax hampers the ability of IDAs to drive economic development through the attraction and retention of business that otherwise would be priced out of New York State. Swift action is needed to pass this legislation, as IDAs face their first payment deadline on March 31, 2010.

We strongly support a repeal of section 2975-a of the public authorities law as proposed by S.6962 which would eliminate the arbitrary and excessive “cost recovery” tax. The plan to include the tax in the 2009-2010 budget was flawed from the start. Even though the state is facing a multi-million dollar budget crisis, it is both counterintuitive and counterproductive to tax the very entities responsible for attracting business, fostering job creation and driving industrial development.

For self-supporting entities like IDAs, shouldering any additional expense is a burden, especially if there was never any chance to budget for the expense. The Department of Budget was required to notify all IDAs of their upcoming assessments by November 1, 2009.  No notifications were ever received. But, in early February 2010, a month before the assessments were to be paid, the state’s IDAs received bills ranging from $7,500 to $600,000. Given the disastrous effects these bills could have on pending projects, this tax must be repealed immediately to protect IDAs from the burden of payment.  
 
Repairing the state's fiscal situation will require thoughtful spending reductions and a commitment by our elected representatives to reduce the burden on taxpayers - not the "cost-shifting" quick fixes that continue to be proposed. I encourage you to advocate for your Senate colleagues’ support to retract this harmful, job-killing tax before March 31.  

Sincerely,

Andrew J. Rudnick

cc.    Governor Paterson
         Robert Megna, NYS Division of Budget