New York state Sen. James Skoufis, who chairs the Senate Investigations and Government Operations Committee, released the report on July 26 after five months of review.
The review focused on how industrial development agencies (IDAs) treated developments that likely will happen even without tax benefits.
The committee reviewed documents and answers from seven IDAs in Chautauqua, Rensselaer, Steuben, Sullivan, and Orange counties, the town of Amherst, and the city of Auburn.
IDAs are public benefit corporations created by state law to foster economic and job growth in a given area through economic incentives.
Common incentives are tax-exempt or taxable bonds, sales tax exemptions, reduced property taxes, and mortgage recording taxes.
Last December, the Orange County IDA approved tax incentives of $2.7 million to Milmar Foods, including a $2.5 million reduction in property taxes over 15 years.
Milmar representatives said in the application that tax incentives are necessary to create jobs faster and in greater numbers.
However, months ago, Milmar representatives told the Town of Goshen Planning Board that their expansion project wouldn’t lead to any new employees, so there was no need to expand the water supply or wastewater treatment capacity onsite.
Later, the planning board questioned Milmar representatives on their conflicting accounts, to which a representative replied that the project would create between 16 and 20 new jobs every year, but he didn’t deem those numbers significant enough to be mentioned at previous meetings.
Orange County IDA CEO Bill Fioravanti told The Epoch Times that his agency was aware of the conflicting narratives and had reconciled the discrepancy with Milmar and the Town of Goshen before granting the above tax incentives.
The Epoch Times reached out to Milmar Foods for comment but received none by press time.
The investigative report also finds that buzzwords—job creation, local labor, total fulfillment of project goals—often serve as the rationale for incentives. However, they lack specifics as to why tax benefits are necessary for certain developments to take place.
Several IDA reform ideas are suggested in the report, including amending state law to require stricter cost-benefit analyses and fact-findings by IDAs and giving local tax jurisdictions a voice in decisions.
Following the review, Mr. Skoufis referred the case of Milmar to the Orange County District Attorney’s Office.
District Attorney David Hoovler told The Epoch Times: “We are diligently looking into the matter that has been referred to us. Generally speaking, industrial development agencies are entrusted with verifying information put before them.”
Mr. Skoufis advocated for the creation of the position, and it was included in the state budget early this year.
The State Office of the Inspector General will appoint the monitor, whose salary and work expenses will be paid for by the Orange County IDA.
“We see this as another welcome layer of transparency into the work of the Orange County IDA,” Mr. Fioravanti said. “We are confident that this monitor will further prove to the public that the Orange County IDA is doing everything properly and with the absolute best interest of the county in mind.”
