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(Editor's note: Jim Shultz wrote this column about how the Niagara County IDA has facilitated massive industrial solar while the legislature, including former-chair Becky Wydysh, which controls the IDA, whines about it.)
By Jim Shultz
Lockport Union, Sun and Journal
Why on Earth is Niagara County planning to give more than $17 million in special tax breaks to Bear Ridge Solar, a meg-project that that the people of Cambria and Pendleton fought fiercely against? Here is my column in today's Lockport Union-Sun & Journal.
NO TAX BREAK FOR BEAR RIDGE SOLAR
The Niagara County Industrial Development Authority (IDA) is the county agency that awards special tax breaks to businesses and corporations that are considering locating here. Some of these deals are enormous. Four years ago, the IDA gave Amazon $124 million in local tax breaks for building its giant distribution center in the Town of Niagara.
The IDA is currently considering another giant tax deal, this one for Bear Ridge Solar, the corporation set to cover local farmland with a massive solar project equal to 681 NFL football fields. Now Bear Ridge wants something else, local tax breaks worth more than $17 million.
The question before the IDA is this: How much should the corporation be required to pay in local taxes?
The answer to that question should be simple: Bear Ridge should pay our local governments the absolute maximum amount allowed by law. Anything less is simply theft from the people.
The original idea behind tax deals like this was to give businesses an incentive to locate here. The theory was that, even with those special tax breaks, local governments would end up winners from the taxes the companies still paid and from the jobs they would create for the people who live here. That was the theory.
Fast forward and now almost every business moving here demands a tax break for coming, even if it has no real effect on their decision at all. Amazon does not locate its mega-sized distribution centers based on local taxes, but on far bigger issues like the price of land and access to its customers. And the IDA secured no guarantee that the jobs created wouldn’t just be automated out of existence.
The Bear Ridge case is especially absurd. No one is trying to lure that company here, just the opposite. Neighbors across Cambria and Pendelton fought fiercely for years to keep out the massive project. But the company, with its endless budget for lawyers and lobbyists, won the battle and now it wants a giant tax deal too, like a cherry on top. Why is this happening?
One reason is that neither taxpayers nor local public officials pay much attention to what the IDA does. This leaves it free to do pretty much whatever it wants. The second reason is that the IDA has a stunning conflict of interest that makes it very lucrative for the agency to approve these deals.
The IDA gets its funding by collecting fees from the corporations getting these special tax breaks. Those fees are at least 1% of the total value of each project. The Amazon center was a $500 million project, earning the IDA a payment of about $5 million. Bear Ridge is a $260 million project, which would mean a $2.6 million payout to the IDA.
For the companies, these fees are peanuts compared to the value of the tax breaks they’re getting. But for a small public agency with a dozen staff members, those payments are enormous. It creates a powerful incentive to say yes when corporations come knocking on the agency’s door.
It’s craziness. Last year, the IDA awarded $247,000 in tax breaks to a Niagara Falls fast food operator being investigated by the State Labor Department for stealing his employees’ wages.
Big corporations like Amazon and Bear Ridge insist that they must have certainty about how much they will pay in future taxes and they demand special arrangements called PILOTS (payments in lieu of taxes) to do that.
Wouldn’t homeowners here and our local businesses love to get that deal? Wouldn’t we like to know what our property taxes will look like over the next 10-20 years instead of being surprised every time we get a new reassessment? Wouldn’t we like our local taxes cut?
This is the point. These powerful companies are getting special deals that no regular taxpayer gets, leaving us stuck with the tab. Every dollar in taxes that these corporations escape means fewer services or higher taxes for the rest of us.
The overseer of the Niagara County IDA is supposed to be the Niagara County Legislature, which appoints the IDA’s board of directors. It is time for the Legislature to step in and start asking hard questions, the kind they did not ask about the special Amazon deal or so many others.
On Bear Ridge, the Legislature should be asking this: Does the IDA’s deal with Bear Ridge force the company to pay the maximum amount allowed by law? Is the corporation from North Carolina getting special treatment that other businesses here don’t get?
The people of Niagara County work hard for the money we earn and local taxes here are notoriously high. It is time for the work of the IDA to come out of the darkness and be put under a public spotlight.
No more special tax deals for the powerful at the expense of the rest of us.
