Even when it does the right thing, which the Orange County Industrial Development Agency seems to have done with its recent approval of a tax subsidy for a local business, it can manage to do it the wrong way.
Until the people who run the agency or the state actually crack down on this, however, we seem to be in for more questionable decisions.
The issue this time concerns an expansion by Dana Distributors, a longtime county employer. First of all, it is nice to note that the subsidies in this case are going to a company with deep local roots, not somebody who is coming into town with flashy plans and extravagant promises that will be filled only if taxpayers end up being unwitting partners.
In general, Dana said it was considering two options, leaving the county or adding 46,500 square feet of warehouse space and 12,000 square feet for recycling to its Goshen plant, as well as hiring about 38 new employees.
That’s the kind of situation tailor-made for a local IDA. It’s a good investment.
But the timing stinks. The IDA only granted the tax breaks after Dana had already begun construction and had hired the employees.
As a deputy director for the state Authorities Budget Office, a part of state government which oversees industrial development activities, said when asked about such after-the-fact decisions, “I don’t know what the justification would be for a project already beginning and giving it tax breaks, but I’m sure there are a variety of reasons, and it’s up to the IDA to decide why to do that.”
So much for all those unfunded mandates and unnecessary regulations that politicians love to rail against and run against. Although he said he was commenting in general and not about this specific case, the message comes through very clearly. An IDA can pretty much do whatever it wants to, and the state is going to assume that it knows why.
Going forward, we need to see the IDA board and administrator make a commitment that they will actually enforce the rules that we all assumed were in place, that they will no longer consider an application from a company that has already invested either in a new building or an expansion, in new employees that are already on the payroll.
This is not too much to ask. The taxpayers who are the ultimate source of this money have to meet deadlines all the time. They can’t show up late to pay their taxes without a penalty. They can’t show up the day after the election to vote. Firms that are engaged in serious plans to invest here, either as a newcomer or to expand, have to meet many deadlines to get zoning and other approval and to get loans.
It is not too much for the IDA to operate by those same standards. And given all of the criticism of IDA actions in the past, the lack of accountability when it comes to businesses fulfilling the promises they made to get subsidized, you would think that the IDA would want to avoid more self-inflicted wounds.