A new joint study from Reinvent Albany and Good Jobs First found that two major law firms – Harris Beach and Hodgson Russ – reap millions from upstate IDAs, and are also big contributors to politicians in those IDAs’ districts.
From 2017 to 2022, nine prominent upstate New York Industrial Development Authorities:
- Signed subsidy deals valued $42 billion.
- Collected IDA fees from the deals worth $85.6 million, a small portion of which was paid to law firms in disclosed fees.
- Generated another estimated $29 million to $39 million in undisclosed transaction fees for their law firms.
Our recommendations for IDA reform:
- Eliminate the perverse incentive IDAs have to give away tax revenue by making IDAs local government agencies funded by general revenue within the local budget.
- Require all fees to deal counsels be paid directly (and disclosed fully) by the IDA, not the applicant company.
- Require IDAs to disclose deal counsel fees separately for each transaction to the ABO.
- Forbid IDAs from abating property taxes that would otherwise go to schools.
Read the study here, and don’t miss this story in the Investigative Post.
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Other NY corporate giveaway news from this week:
- Our John Kaehny talks with Spectrum News about NY’s $11 billion in wasteful tax incentives.
- Fort Schuyler, a major player in the 2015 Buffalo Billion scandal, paid an outside attorney $50,000 to process a FOIL request related to the Tesla factory in South Buffalo (Investigative Post). See also the Investigative Post’s story from last week on a secretive state board ruling that Amazon doesn’t need to pay a prevailing wage to receive massive subsidies from Niagara County.
- A study by George Sweeting at the New School’s Center for NYC Affairs finds that without huge tax breaks required in the state constitution, 14 hospitals and universities would have paid NYC up to $1.5 billion this year. Sweeting explores how PILOTs can help make up for lost revenue.
- The State Comptroller’s annual IDA report found that New York IDA projects received more than $1 billion in net local tax exemptions in 2022.
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