February 27, 2008
DiNapoli Calls for More Accountability for IDAs
State Comptroller Thomas P. DiNapoli today proposed measures to make Industrial Development Agencies (IDAs) more accountable and financial reporting more accurate after a report released today found that IDAs continue to report project, job creation and other data that is inconsistent, incomplete and not independently verified.
DiNapoli outlined his recommendations in a report that examines the financial and employment trends of the 116 IDAs in New York State. His measures include:
Tightening IDA annual reporting requirements. Under current law, an IDA’s authority to offer state tax exemptions is suspended if it fails to report complete or substantially complete annual financial information. Starting with the 2007 reporting year, the Office of the State Comptroller (OSC) will be increasing its oversight of IDA reporting and generally accept only those audited annual financial statements that are in compliance. For example, an IDA which omits job information could have their ability to provide financial assistance suspended.
Expanding his office’s oversight of IDAs and Local Government Development Corporations (LDCs) to include access to tax and wage data during audits.
Calling for an increase in Executive programmatic oversight of IDAs through existing statutory oversight powers of the Empire State Development Corporation (ESDC) and Authority Budget Office (ABO) in the areas of job and wage verification.
“IDAs are supposed to create jobs,” DiNapoli said. “When they report on job creation, taxpayers should know that the numbers are right. Given the way IDAs are currently reporting information, there is no way of knowing that. These measures will make IDAs more accountable to the public they serve and establish clear standards that IDAs must follow, or they risk serious consequences.”
IDAs are independent public authorities that offer real property tax abatements, sales and mortgage recording tax exemptions, and low interest rate bonds to attract, retain and expand businesses.
Each IDA is legally required to submit a financial statement to OSC annually, which includes data related to the number of jobs created or retained and the amount of all tax exemptions authorized. In 2003, OSC undertook efforts to improve the accuracy and quality of the data reported by IDAs, as well as collaborated with the ABO to develop a comprehensive online reporting system called the Public Authorities Reporting Information System (PARIS) that was implemented in November 2007. In addition, OSC continues to offer guidance to IDAs in meeting statutory requirements.
While there have been improvements in data reporting, the report issued today found the complete project costs were not available for 27 percent of all projects. In addition, complete and accurate job data was not reported for 9 percent of all projects.
DiNapoli will also propose more comprehensive public authority oversight legislation including controls on authority debt, addresses board member terms and limits on the types of activities that authorities provide to those related to their core missions.