Economic Development and the Cost to the Citizens


by Dave Duncan
previously printed in the Bridge newspaper, but still timely

For many years the municipalities of Broome County and the County itself have been suffering from a drastic income shortfall. Reasons include the decline in population related to the manufacturing plants that have relocated elsewhere, the declining real incomes of the remaining workers, an increase in lower paying services jobs, the aging of the population and the necessity of maintaining the crumbling infrastructure. The problem cannot solely be attributed solely to current or past elected officials.

We are now in a position where our representatives and the Chamber of Commerce tell us, that we, the average residents must pay more taxes, while at the same time having our basic services cut. Each new budding politician campaigns on the platform of correcting the mismanagement of prior office holders but when it comes to protecting the interests of the financial and corporate elites, nothing changes. Yet there is another, unexplored, part of the equation.


Who Should Pay?
In the past 25 years economic development deals were struck with companies that received public support in loans, tax breaks and other expensive considerations that were, over time, to bring bundles of dollars and jobs to the local governments and schools. A few of these past deals include the Boscov Department Store, the Metro Center Mall, and the Sheraton Hotel. There are many, more through the County too numerous to list. Why then are we not better off?

Examine These Tax Giveaways
Why has no governmental body, newspaper or other media, examined our development projects of the past 25 years? We know that Boscov still pays little, if any, in property taxes. The Metro Center Mall pays 1/8th of the taxes due. The Sheraton Hotel was given a tax break and $11 million in public money. The Sarkisian Developers that built the hotel never paid back all of the loans and walked away from the project to avoid the cost of clean-up after the floods of two years ago. The City recently sold the hotel for less than it took to pay off the loans and the taxes due. Taxpayers somewhere will have to come up with approximately $200,000 for back taxes due on the hotel. Although these are old stories, they are impacting us negatively today.

Let us look at today.
Will the City of Binghamton make Boscov pay the real taxes due today? Did the City give the new out of town owners of the hotel another tax break? If so, how much and for how long? After 26 years for Boscov and over 20 years for the hotel, when do they start paying their fair share?

There are numerous development agencies in Broome County and in NYS that set up deals whereby businesses, usually large ones, get a bundle of taxpayer dollars along with tax breaks. The largest of these agencies is the Broome County Industrial Development Agency. For more than thirty years this organization has been giving away the tax dollars to bring jobs and an increased tax base to the county. When will there be a public accounting of the jobs that were to be created and the cost to the public for these jobs? The BCIDA financed the new Press & Sun-Bulletin plant in Johnson City. The P and SB plant will pay 50% of the taxes due for 15 years. What will the Village and the JC Schools get in return?

The BCIDA is planning to subsidize the new student housing complex in downtown Binghamton… Will city officials speak out against a payment in lieu of taxes? Will the school board agree to such a deal? What do the unsubsidized landlords in the area say about using public money to subsidize their competition? Will other landlords get a tax break? These questions need to be answered?

Empire State Development Corp.

This agency provides grants, tax incentives, tax credits, loans, and sales tax incentives to create jobs or “preserve” jobs at local businesses. One Empire Development Zone project in upstate NY received a $500,000 a year tax break in return for creating 200 jobs. The project created only one and one-half jobs but will continue to receive the tax break for ten years. Where is the list of the local companies that received these incentives? Why can’t they pay for the police, firefighters, and public works employees that we all need and only some of us pay for?

Other Development Agencies

Many other development agencies exist and the same questions must be put to them on tax deals and money dispensed.

Who Serves on Development Agency Boards?

Do the boards reflect the population of our community by class, gender and race? Will the people on these boards be taking the jobs created? Do the boards cater more to the financial needs of the rich and not the social needs of the people? Don’t we need real “people” boards?

We need a public accounting of all of the development agency projects and we need it now before any new deals are struck. A new order of economic development must be based on human and social needs and not on corporate and private wealth accumulation. Maybe the representatives of some of the public employees whose pensions and health care plans are under attack could help their cause by examining the companies that don’t pay for the services.

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