ALBANY – A recent report by the New York State Comptrollers Office shows the Chautauqua County Industrial Development Agency (CCIDA) ranked among the top counties in the state in 2018 when it came to operating expenses, as well as net tax exemptions given to projects. But despite the high rankings in those two categories, CCIDA ranked among the lowest in the state when it came to job creation.
As a result, the IDA had a poor rate of return when comparing each net job gained to the amount of money spent by the IDA, as well as the amount of tax incentives that were given to various projects.
On July 20, State Comptroller Tom DiNapoli released his annual IDA report, which focuses on the 109 different Industrial Development Agencies that operate across New York State, using data from the 2018 fiscal year. There were a total of 56 County IDAs within the report, along with 53 IDAs being operated within various cities or village.
The report included data sets in 11 different categories for all IDAs: Project Count, Total Project Values, Total Tax Exemptions, Total PILOTs (Payments In Lieu Of Tax agreements), Total Net Tax Exemptions, Estimated Jobs Created, Estimated Jobs Retained, Full-Time Equivalents Before IDA, Current Full-Time Equivalents, Net Jobs Gained, and IDA Expenses.
It also provided a region-by-region comparison of IDAs, focusing on the 10 economic development regions of the state.
Of the 56 County IDAs included in the report, 55 of them had data reported for each of the 11 categories. Of those 55 counties, CCIDA ranked in the Top 10 for total operating Expenses (3rd overall at $4.4 million) and Net Tax Exemptions (9th overall at $15.3 million). However, despite having a larger operating budget than most every other county IDA and also giving out more tax incentives (Net Tax Exemptions) than 46 other County IDAs, CCIDA still ranked near the bottom of the list for Net Jobs Gained (48th overall at 171 jobs).
For the other eight categories, CCIDA ranked as followed: Project Count (14th – 52 projects), Total Project Values (19th – $814.4 million), Total Tax Exemptions (15th – $16.7 million), Total PILOTs (35th – $1.3 million), Estimated Jobs Created (33rd – 584), Estimated Jobs Retained (18th – 2,245), Full-Time Equivalents Before IDA (19th – 2,248), and Current Full-Time Equivalents (30th – 2419).
For population comparison, Chautauqua County ranked 18th on the list with 128,000 people.
CCIDA COMPARISON TO SIMILAR AND REGIONAL COUNTIES
When looking at the data and comparing CCIDA’s numbers to the eight other IDAs serving similar populations (+/- 32,000 people), CCIDA had the worst rate of return on net jobs gained for every dollar it spent. CCIDA spent $25,730 per net job gained. The second highest rate of return was just $4,694 (St. Lawrence County IDA), more than $20,000 less per job than what CCIDA had invested.
The comparison didn’t get any better when looking at the rate of return on the amount of Net Tax Exemptions CCIDA gave out in 2018. For every net job gained through CCIDA development efforts, the CCIDA provided $89,473 in net tax exemptions. None of the eight other IDAs serving similar populations came even close to that amount. In fact, the second highest was the Rensselaer County IDA at $16,660 in tax exemptions per net job gained. Six of those eight counties saw their rate of return on tax exemptions below $5,000 per job created.
Regionally, CCIDA didn’t fair much better in the rate of return on expenses and tax exemptions. Of the five County IDAs included in the Western New York Region, only the Allegany County IDA spent more money per net job gained ($31,250). Cattaraugus County ($265 per net job gained), Niagara County ($398 per net job gained), and Erie County ($1,183 per net job gained) were all significantly lower than CCIDA’s rate of return on expenses. When looking at the average for the entire Western New York Region, the rate of return was $3,147 in IDA expenses per net job gained. The statewide average was $4,378.
CCIDA’s rate of return on Net Tax Exemptions was also significantly higher than any of the four other county IDAs in the region.
According to the comptrollers report, IDAs must pay for their own administrative expenses, including personnel and overhead costs. These expenses are largely funded with project fees, and IDAs may also collect rent on properties they own. That means that the IDA operating expenses have little impact on taxpayers in the county.
However, the net tax exemptions provided by the IDA does come from the local tax base, primary through lost property taxes, but also sometimes from sales and mortgage tax exemptions. That means local governments in Chautauqua County likely missed out on an estimated $89,000 in lost tax revenue for each of the 171 net jobs gained in 2018.