Senator Ryan and Assemblymember Bronson Introduce Bill Prohibiting IDAs from Abating Property Taxes that Should Go to Schools

Reinvent Albany’s Senior Research Analyst, Elizabeth Marcello, is one of the speakers at this press conference.
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Click here to view the press release on Good Jobs First’s website.

Washington, DC — Schools in New York State lost at least $1.8 billion in fiscal year 2021 to corporate tax abatements. That makes New York schools by far the biggest known losers to abatements, more than three times second-place South Carolina, a new report by Good Jobs First reveals.

The study arrives as NYS legislators introduce a bill (S.89/A.351) that would prohibit Industrial Development Agencies (IDAs) from abating the school share of property taxes.

The study and legislation will be featured at a press conference:

Date:  Wednesday, February 8, 2023
Time: 12:00 Noon
Place: NYS Capitol Building, 4^th Floor

Speakers: Greg LeRoy, Good Jobs First; Sen. Sean Ryan and Assemblyman Harry Bronson (lead sponsors of the legislation); Ron Deutsch, New Yorkers for Fiscal Fairness; NYSUT, Rev. Peter Cook, New York State Council of Churches; Michael Kink, Strong Economy for All Coalition; Dr. Elizabeth Marcello, Reinvent Albany; Marina Marcou-O’Malley, Alliance for Quality Education; Erica Vladimer, IONY and others.

This study’s findings were enabled by a new government accounting rule that requires — for the first time ever — that most school districts, cities and counties disclose how much revenue they lose to such corporate tax breaks. The new reporting rule is Governmental Accounting Standards Board (GASB) Statement 77 on Tax Abatement Disclosures.

The $1.8 billion in revenue losses are spread among 318 of the state’s 685 public school districts. In all but five of those 318 districts, the losses are reported directly by the independent school district. In the “Big Five” cities (New York, Buffalo, Rochester, Syracuse and Yonkers), the school losses are computed as a share of overall city losses.

Tax abatements cost an average of $541 per pupil per year among the affected school districts, which puts New York in the country’s top five. But that average masks a wide range. For example, losses are just $3 per student per year in West Genesee, where the student body is 85% white, but over $5,000 for Peekskill, where nearly nine out of ten students are of color and over three-quarters qualify for free or reduced-price lunches. And from $5 per student per year in Hoosick Falls, which is almost all-white, to $2,000 per student for Uniondale where almost all attendees are of color.

“Our findings are the latest evidence of New York State’s failed economic development system,” said Greg LeRoy, executive director of Good Jobs First, which led the campaign to win the accounting reform. “When governments disinvest education in the name of economic development, they actually harm their business climates. If New York aspires to be a ‘sticky’ place for promising companies in the 21^st century, it must have a highly educated workforce.”

State Senator Sean Ryan, Chair of the Senate Committee on Commerce, Economic Development and Small Business, said, “We all know that our state’s schools are engaged in a constant battle for the resources they need to provide our children the quality education they deserve. What most people would be surprised to learn is that property taxes are their primary source of revenue. When IDAs promise to waive a corporation’s property taxes, they are stealing money meant for school districts and exacerbating budget gaps. This forces us to increase school funding to close those gaps and sticks taxpayers with the bill. Prohibiting IDAs from waiving school taxes will support education, lower New Yorkers’ tax bills, and prevent corporations like Amazon from playing IDAs around the state against one another to get the best deal.”

Assemblymember Harry Bronson, Chair of the Assembly Standing Committee on Economic Development, Job Creation, Commerce and Industry, said: “Public education is key to opening opportunities; that is why I have fought so hard to secure funding for our schools and for our children. Public education is largely funded through real property taxes. Schools rely on this revenue, yet they lose it when IDA’s reduce business property tax obligations. These deals made by the IDAs may benefit business, but any supposed benefit is on the backs of our students, and all too often students of color. The report from Good Jobs First shows the damage to school funding and the educational process when school districts are excluded from the IDA negotiating process. The report is a clarion call to action, and I am pleased to sponsor this vital legislation introduced with Senator Ryan.”

“Our students, communities and educators deserve to receive the funds that are due to them so we can focus on what is our most important goal: educating the next generation,” said Andy Pallotta, president of New York State United Teachers, a statewide union with more than 600,000 members in education, human services, and health care. “As pointed out by Good Jobs First’s research, this is an issue of equity and we support efforts to make sure all of New York’s students have the opportunity for a world-class education. Education is not only the great equalizer, it is the real economic driver into New York’s future.”

“We strongly support the Ryan/Bronson bill. IDA tax breaks are a triple whammy of terrible tax policy. They do not work, they are unfair to other taxpayers, and they take funding away from public schools. IDA tax breaks aren’t free money. Economists call them ‘tax expenditures’ because they are a form of off-budget spending that takes public funding away from schools and other basic services,” said Dr. Elizabeth Marcello, Senior Research Analyst for Reinvent Albany. 

Ron Deutsch, director of New Yorkers for Fiscal Fairness noted, “This groundbreaking report from Good Jobs First should be a wake-up call for legislators and parents alike.  Nearly $2 billion in property tax revenue is being diverted from our schools and provided to wealthy corporations with highly dubious outcomes and benefits to the community. Kudos to Senator Ryan and Assemblymember Bronson for introducing legislation that would prevent IDA’s from doling out school revenue like candy and giving away our kids future.”

“State lawmakers need to take action: it’s time to stop wasteful giveaways by local IDAs that defund our local schools and drive-up property taxes,” said Michael Kink, executive director of the Strong Economy For All Coalition. “We call on the Senate and Assembly to include the Ryan-Bronson legislation in their one-house budget bills and make them a top priority for this year’s state budget, due April 1.”

“The State is finally fully funding Foundation Aid to conclude a 30-year legal and legislative fight. It’s rather unfortunate that all this time, it’s been giving billions away in the form of unnecessary local IDAs. All this money could be better spent in our public schools, to expand early childhood education, not as giveaways that return nothing to the local community,” said Jasmine Gripper, Executive Director of Alliance for Quality Education.“Senator Ryan and Assemblymember Bronson’s bill will ensure schools and teachers have the public funds necessary to support every student’s well-being. It’s time for New York’s long history of prioritizing corporations over communities to end.”

“There are far more beneficial ways to foster economic development than giving 1.8 billion away from our public schools for corporate tax breaks. A better approach is to keep our public schools strong and well-funded so that communities are more attractive to corporations wanting to relocate or remain in the community. Our children should not become unwitting philanthropists for ill-conceived economic development projects. Moreover, homeowners, who pay the highest property taxes in the nation, expect municipalities to be good stewards of the tax dollars they receive and do not look kindly on the upward pressure placed on their tax bills from unwarranted corporate tax breaks,” said the Reverend Peter Cook, Executive Director, New York State Council of Churches.