In 2015, the Governmental Accounting Standards Board (GASB) issued new rules requiring state and local governments to disclose certain tax abatements in annual financial reports. This new requirement makes information about tax abatements at the state and local government levels available for the public to review, according to the Tax Policy Center.
The organizations Good Jobs First and Reinvent Albany recently published an analysis of that public information.
The groups found that tax breaks to businesses provided by New York’s 107 Industrial Development Agencies (IDAs) between 2018 and 2021 cost public schools billions of dollars.
In 2021 alone, tax abatements cost New York state school districts $1.8 billion, according to the report.
“Now we know this data. It’s very real and it’s very concerning,” Ron Deutsch told Capital Tonight.
According to Deutsch, who is a senior policy fellow at Reinvent Albany and director of New Yorkers for Fiscal Fairness, one-third of IDAs additionally received 100% of their operating revenue from transaction fees in that same year — 2021.
“We think it’s a bit perverse in the sense that, they are basically giving these companies payments in lieu of taxes, or full abatements on property taxes and school taxes and county taxes that we all pay, but these businesses would not have to pay,” he said.
According to those who support IDAs, the entities are supposed to help promote business development in municipalities by providing tax breaks.
Deutsch said the process needs to be reformed, something that state Sen. Sean Ryan and Assemblyman Harry Bronson are focused on during the balance of the legislative session.
The two have introduced a bill to prohibit these kinds of deals from affecting school tax revenue.
“Basically, what we’re doing is giving a company like Amazon almost a free ride on school taxes when they’re one of the wealthiest companies in the world,” Deutsch said in support of the bill.
