CEJ and Occupy Buffalo demand good jobs not giveaways

CEJ took to the streets of Amherst this week with Occupy Buffalo and our community and labor partners to demand that New York’s Industrial Development Agencies stop giving handouts to the 1% and start using public money for the public good. Sheridan Drive was the scene of a raucous protest on Thursday afternoon, as we gathered in front of Northtown Lexus with our demand that corporate subsidies deliver good jobs and shared community benefits.

The rally was one of several Getting Our Money’s Worth coordinated actions that happened throughout the state calling for economic development reform. Prior to the rally, we held a teach-in on the impact of economic development subsidies with Occupy Buffalo activists in Niagara Square.

In May 2010, Northtown Automotive Cos. received a large subsidy of $536,000 from the Amherst IDA to move its Lexus dealership from 3930 Sheridan Drive across the street to 3845 Sheridan Drive in Amherst. Despite guidelines for IDAs in Erie County making auto dealership ineligible for tax breaks, the Amherst IDA granted $245,000 in sales tax breaks, $213,968 in property tax breaks, and $77,000 in mortgage tax breaks.

As Allison Duwe, CEJ executive director, said: “The Amherst IDA, along with IDAs in Western New York and across New York State, consistently hand out tax breaks to companies that don’t promote real economic growth. All Erie County residents are impacted by this deal because the IDA gave this Lexus dealership a break on its county property taxes. We’re not opposed to subsidies if they support companies that are helping to build a better future but this deal is ludicrous.”

To illustrate how ludicrous the deal is, we performed a short skit with Eric Gallion, who played a “billionaire” and interrupted our press conference by defending the Amherst IDA. “My friends at the Amherst IDA gave this luxury auto dealership a half million dollars and change in tax breaks to move their showroom across the street,” Gallion joked. “So this subsidy decreases the property and sales taxes for the dealership, and increases the tax burden on everyone else in Erie County. What’s wrong with that? No business should have to foot its own bill when it wants to move across the street. Naturally the public should pay for that.”

In all seriousness, this isn’t the only time that IDAs have given out tax breaks like this. According to our new report co-authored with ALIGN (Alliance for a Greater New York), Regional Review: Job Creation and New York’s Industrial Development Agencies, many IDAs across the state do not require job creation or job retention in order for a business to receive a tax break. This means that there is no way to ensure a tax break will benefit the overall community and not just the 1%.

Additionally, IDA subsidies in Western New York advance disinvestment in urban areas. The city of Buffalo, with 30% of the county population, had only 17% of the IDA tax-exempted properties in 2009. This is a trend that needs to change if we want to reduce sprawl and see more development in urban communities.

The 14 IDAs of Western New York financed 702 projects, giving away $48.5 million in net tax exemptions in 2009 alone. This money could have been used for much better purposes. With it we could have funded the education of over 2,600 students for one year or retrofit over 3,700 small businesses for energy efficiency, save millions of dollars in energy costs and employ nearly 800 workers in the construction industry.

This $48.5 million in next tax exemptions was supposedly going towards future job creation, but IDAs are failing to create the jobs that they promise. The IDA subsidized 59 projects that ended in 2009, only twelve of which, or 20%, met or exceeded their job creation or retention promises. Nine of these projects lost 1,772 jobs. Another 20% of these projects fell short of their job creation or retention promises by 1,300 jobs. The other 60% of these projects had no jobs created or never even promised to create or retain jobs.

New Yorkers are not getting their money’s worth from IDA investments. IDAs use taxpayer subsidies on development projects that fail to meet their job creation targets, create poverty-wage jobs without benefits, encourage sprawl and ultimately leave the community taking their jobs and our money. To move us in a new direction, IDAs and other economic development initiatives should adopt strong measures that result in concrete benefits for New Yorkers and build an economy with shared prosperity. We want to see development projects that create good jobs, pay family sustaining wages with benefits, promote a healthy and sustainable environment and commit to staying in New York.