Industrial Development Agencies and Local Development Corporations are non-profit entities authorized by New York State to provide tax incentives, grants, and financing to businesses for economic development projects. This page covers CBC’s work on the oversight and accountability of these entities, the consolidation of fragmented regional agencies, the implementation of unified economic development budgets, the use of performance-based incentives, and the transparency of tax expenditure reporting.
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Create a unified economic development budget to improve fiscal transparency.
Increase oversight powers of the State Comptroller and Authorities Budget Office to ensure accountability.
Key Data
As of July 2023, New York State and local governments spent $10.7 billion on economic development in 2022, with local and county governments accounting for $6.3 billion of that total.
As of July 2023, local Industrial Development Agencies (IDAs) and Local Development Corporations (LDCs) are non-profit entities controlled by local or county governments but operate independently of many public procurement and financing restrictions.
As of November 2019, LDCs and IDAs held a combined $29 billion in debt outstanding at the end of 2017, consisting of $20 billion in conduit debt and $9 billion in other debt.
As of November 2019, IDAs provided more than $700 million in tax benefits in 2017, while New York City LDCs spent $1.1 billion on economic development.
New York State and its localities spent $10.7 billion on economic development in 2022, a figure projected to reach $13 billion annually by 2025 despite a lack of evidence that these programs effectively create jobs. To address this, officials should implement a unified economic development budget, utilize performance-based incentives, and increase oversight to ensure these massive resources are not squandered.
Recommendations related to Industrial Development Agencies (IDAs)
Rigorously evaluate existing incentives and programs to determine their effectiveness.
Narrow, shrink, or eliminate programs that are not proven effective.
New York State provides $5.6 billion annually in financial assistance to businesses through local development corporations and industrial development agencies, yet these entities currently lack sufficient oversight. Legislation is needed to authorize the Office of the State Comptroller to audit these corporations to ensure public resources are used effectively.
Recommendations related to Industrial Development Agencies (IDAs)
The Governor should sign A7476/S5445 to provide needed oversight by authorizing the Office of the State Comptroller to audit local development corporations.
New York State should improve oversight of local development corporations to safeguard against the misuse of public resources.
Key Data
$5.6 billion
— Annual financial assistance provided by local governments in New York State to businesses directly or through Industrial Development Agencies and local development corporations.
192
— Number of local development corporations focused on economic development in 2017.
$1.2 billion
— Total amount spent by 192 local development corporations focused on economic development in 2017.
New York's economic development landscape is fragmented, with over 100 Industrial Development Agencies and nearly 300 Local Development Corporations often duplicating efforts and lacking sufficient accountability. Consolidating these entities into regional bodies and strengthening oversight through standardized reporting and auditing is essential to improve the efficacy of taxpayer-funded economic development.
Recommendations related to Industrial Development Agencies (IDAs)
Consolidate local IDAs into regional IDAs and prohibit LDCs from engaging in economic development activities.
Improve reporting requirements to ensure data on projects receiving benefits is consistent, accurate, and timely.
Improve accountability by allowing the State Comptroller to audit LDCs to ensure they have appropriate internal controls to safeguard public funds.
Increase resources for the Authorities Budget Office (ABO) to allow it to conduct its full scope of work, including reviewing reports and overseeing public authorities.
Key Data
$10 billion
— Total amount allocated to economic development by state and local governments in 2018.
$29 billion
— Combined debt outstanding for LDCs and IDAs at the end of 2017.
$700 million
— Tax benefits provided by IDAs in 2017.
$1.1 billion
— Amount spent by New York City LDCs on economic development in 2017.
$272 million
— Grants provided by LDCs in 2017 to economic development projects that planned zero new jobs.
$100 million
— Amount spent by IDAs and LDCs on staff wages, salaries, and benefits in 2015.
The 2019 Economic Development Sweetener Scorecard tracks 69 legislative proposals, including several that would expand the scope and authority of Industrial Development Agencies (IDAs) to fund multi-family housing, retail, and professional office projects. This compilation highlights the breadth of proposed economic development incentives and their potential fiscal impacts across various sectors in New York.
This 2019 scorecard tracks 67 economic development bills, including several that would expand the scope and authority of Industrial Development Agencies (IDAs) in New York. These proposed legislative changes would allow IDAs to provide new forms of funding, such as equity, and expand their reach into residential and retail projects.
The 2019 Economic Development Sweetener Scorecard tracks 67 legislative bills, including several proposals that would expand the scope of Industrial Development Agencies (IDAs) to include residential housing, retail projects, and equity funding. These legislative efforts reflect a broader trend of utilizing tax incentives and expanded agency powers to stimulate various sectors of the state economy.
The 2019 Economic Development Sweetener Scorecard tracks various legislative proposals in New York aimed at expanding tax incentives, grants, and loan programs for businesses. The document specifically identifies several bills that would broaden the scope of Industrial Development Agencies to include multi-family housing, retail projects, and equity funding.
Watch the original segment here . There's an ongoing debate over the state's use of taxpayer money for economic development efforts, but a lot of investment happens at the local level, through Industrial Development Agencies. And those are subject to oversight from the state's Authorities Budget Office- but there's still…
New York State's economic development landscape involves over 100 Industrial Development Agencies and 200 local development corporations that collectively receive over $8 billion in annual funding. To improve accountability and transparency, these entities should face consolidated oversight, expanded reporting requirements, and stronger enforcement powers to ensure public funds are used effectively.
Recommendations related to Industrial Development Agencies (IDAs)
Further consolidate economic development to reduce administrative costs and create a more coordinated regional approach, as there are currently more than 100 IDAs and close to 200 local development corporations across the state.
Strengthen ABO enforcement powers because the Authorities Budget Office is currently unable to suspend an IDA’s operations for noncompliance.
Expand ABO resources to allow for more thorough analysis of IDA and LDC inputs into the Public Authority Reporting Information System.
Authorize the State Comptroller to audit local development corporations to ensure greater oversight.
Expand the proposed reporting requirements to include local development corporations.
Expand reporting requirements to State entities engaged in economic development to ensure systematic and thorough transparency.
Key Data
$750 million
— Total benefits provided by Industrial Development Agencies as of 2015, the vast majority of which were through tax reductions.
100
— Number of Industrial Development Agencies operating across New York State.
200
— Number of local development corporations operating across New York State.
$8 billion
— Amount allocated by state and local governments per year toward economic development.
Legislative proposals in New York seek to expand the authority of Industrial Development Agencies by allowing them to finance retail projects, provide direct equity funding, and re-establish local agencies. These measures, which broaden the scope of economic development programs, are recommended for veto.
Recommendations related to Industrial Development Agencies (IDAs)
The Governor should veto A4926, which expands the scope of projects eligible to receive tax benefits from the Town of Islip Industrial Development Agency to include retail.
The Governor should veto A5753, which re-establishes an Industrial Development Agency (IDA) in the Town of Yorktown.
The Governor should veto A7894A, which allows Industrial Development Agencies to support some retail projects, including professional office uses in mixed-use projects.
The Governor should veto A8358, which allows Industrial Development Agencies to provide loans, grants, and equity funding for seed or early-stage projects.
The Governor is urged to reject various economic development bills, including those that would expand the scope of projects eligible for tax benefits from Industrial Development Agencies or authorize them to provide direct loans and grants. These proposed legislative changes would broaden the reach of local development agencies into retail and professional services, potentially increasing the use of tax incentives for projects that do not align with traditional economic development goals.
Recommendations related to Industrial Development Agencies (IDAs)
The Governor should reject legislation that expands the scope of projects eligible to receive tax benefits from the Town of Islip Industrial Development Agency to include retail.
The Governor should reject legislation that re-establishes an Industrial Development Agency in the Town of Yorktown.
The Governor should reject legislation that allows Industrial Development Agencies to support retail projects, including professional office uses in mixed-use projects.
The Governor should reject legislation that allows Industrial Development Agencies to provide loans, grants, and equity funding.
This scorecard tracks various legislative proposals concerning New York's economic development programs, including several bills aimed at expanding the scope and authority of local Industrial Development Agencies. These legislative efforts range from allowing Industrial Development Agencies to support retail and professional service projects to authorizing them to provide direct loans, grants, and equity funding.
This legislative scorecard tracks various New York State bills concerning economic development, including several proposals that would expand the scope, authority, or establishment of local Industrial Development Agencies. These legislative actions range from allowing agencies to support retail and professional office projects to authorizing them to provide direct loans, grants, and equity funding.
The data points are 348 and 74. 348 is the number of Local Development Corporations and Industrial Development Agencies in NYS. These corporations made $16.2 billion in economic development investments from 2011 through 2015, yet only 5 of the state's 62 counties have had job growth higher than the national…
New York's system of Industrial Development Agencies and Local Development Corporations is fragmented and lacks sufficient accountability, with billions of dollars in investments often failing to demonstrate clear economic benefits. Reforms are needed to consolidate these entities, strengthen oversight, and standardize reporting to ensure public resources are used effectively.
Recommendations related to Industrial Development Agencies (IDAs)
IDAs in each of the state’s 10 REDC regions should be consolidated into a single multicounty IDA per region to better support strategic investment plans.
The state should grant the Authorities Budget Office the ability to assess fines, suspend directors, or curtail certain activities of authorities that remain out of compliance with state law.
Oversight of the data being input into the Public Authority Reporting Information System should be increased, with data for large projects verified individually and smaller projects subject to spot-checking.
The State Comptroller's audit authority should be extended to apply to Local Development Corporations directly, rather than only through their relationships with local governments.
IDAs and LDCs should adopt standardized metrics for measuring economic development outcomes, including job creation, retention, and actual capital investment, to allow for better performance evaluation.
Key Data
$1.9 billion
— Total spending and tax expenditures by IDAs and LDCs in 2015.
$24 billion
— Total debt outstanding held by IDAs and LDCs.
$3.1 billion
— Total tax breaks granted by IDAs and LDCs from 2011 to 2015.
55.7%
— Portion of IDA procurement costs that were for non-competitively bid contracts during the 2016 reporting year.
16.4%
— Portion of LDC procurement costs that were for non-competitively bid contracts during the 2016 reporting year.
$100 million
— Amount spent by IDAs and LDCs on wages, salaries, and benefits in 2015.
New York spends over $8 billion annually on economic development programs, yet the 109 local Industrial Development Agencies (IDAs) lack uniform review and monitoring procedures for the $660 million in tax breaks they provide each year. Legislation S5867/A7915 aims to address these inconsistencies by mandating standard applications, rigorous project evaluation criteria, and uniform policies for recouping benefits when targets are not met.
Recommendations related to Industrial Development Agencies (IDAs)
S5867/A7915 requires a standard application that includes a detailed description of the project and the projected costs.
Applicants would need to assert the project would not occur without financial assistance, or if the project could be completed without assistance, applicants would have to explain why the project is worthy of assistance anyway to ensure IDA projects are necessary.
IDAs would have to develop standard criteria for evaluating and selecting projects, including a cost-benefit analysis for each project.
The bill requires uniform project agreements and standard policies to discontinue or recoup benefits if projects fail to meet targets.
Governor Cuomo should sign S5867/A7915 to improve the practices of Industrial Development Agencies.
Key Data
$8 billion
— Annual spending by New York on economic development through various state and local programs.
109
— Number of local Industrial Development Agencies (IDAs) currently operating in New York.
$660 million
— Annual tax breaks provided by Industrial Development Agencies.
The FY 2016 Executive Budget includes a proposal for a more stringent approval process for state tax breaks issued by local Industrial Development Agencies, which is supported as a necessary reform. This measure aims to improve oversight of the tax breaks provided by these agencies to ensure they are more effectively managed.
Recommendations related to Industrial Development Agencies (IDAs)
The state should implement a more stringent approval process for state tax breaks issued by local Industrial Development Agencies.
New York City's economic development programs, including tax expenditures, capital spending, and conduit financing, have grown significantly over the past decade, necessitating reforms to improve cost-effectiveness and transparency. The next administration should prioritize infrastructure investments in high-growth potential areas, refine tax incentive standards, and better manage the Economic Development Corporation to ensure these tools effectively drive job creation.
Recommendations related to Industrial Development Agencies (IDAs)
The next administration should use capital investments to enhance infrastructure in neighborhoods with job growth potential.
The city should encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing.
The city must continue reform of as-of-right tax expenditure programs to make them more cost-effective.
The city should establish clearer standards for awarding discretionary tax expenditure benefits.
The city should continue rezoning and expand special mixed use districts to facilitate diversified job growth in areas currently limited to industrial use.
The city should better manage the Economic Development Corporation by focusing on job creation and enhancing transparency.
Key Data
$9.2 billion
— Total face value of bond issues for 226 projects completed by the New York City IDA, Trust for Cultural Resources, and Build NYC between fiscal years 2002 and 2012.
$1.6 billion
— Annual amount of tax expenditures in 2012, which more than doubled over the previous decade.
$751 million
— Annual capital spending on economic development in 2012, which nearly tripled since 2002.
$238 million
— Annual cost of discretionary tax expenditure benefits.
$2,000 to $398,000
— Range of benefit awarded per job for projects approved for discretionary tax benefits in fiscal years 2010 and 2011.
$368 million
— Annual relevant operating expenditures for economic development in 2012.
The Governor's proposal to restrict state sales tax breaks granted by local Industrial Development Agencies is a positive step toward aligning economic efforts and ensuring tax breaks are limited to appropriate projects. This measure would require projects to meet specific program standards and obtain regional approval to qualify for exemptions.
Recommendations related to Industrial Development Agencies (IDAs)
The State should adopt the Governor's proposal to limit state sales tax breaks granted by local Industrial Development Agencies by requiring projects to meet Excelsior program standards and obtain Regional Council approval.
New York State's economic development landscape is fragmented, with over 100 Industrial Development Agencies (IDAs) operating alongside various state agencies and public authorities, necessitating consolidation to improve efficiency. To ensure accountability and transparency, the state should implement a Unified Economic Development Budget that accounts for all direct subsidies, tax expenditures, and grants across every level of government.
Recommendations related to Industrial Development Agencies (IDAs)
The state should consolidate the more than 100 Industrial Development Agencies to reduce the fragmentation of economic development efforts.
New York should implement a Unified Economic Development Budget that includes direct subsidies, tax expenditures, and other investments from all levels of government, including IDAs.
The state should not authorize additional funds for another round of regional competition until the 'hydra' of economic development is tamed.
Empire State Development should develop a consistent set of performance measures that look at both output and outcome measures to improve accountability.
The state should improve the accountability and transparency of all expenditures to ensure that grants and preexisting programs are successful.
Key Data
$6.6 billion
— Annual state and local investment in direct subsidies and tax expenditures for economic development.
100
— Number of Industrial Development Agencies (IDAs) in New York State that demonstrate a need for consolidation.
$783 million
— Amount of funding just awarded in the regional economic development competition.
28:1
— Leveraging ratio of public to private capital reported in the Central New York regional plan.
6.5:1
— Leveraging ratio of public to private capital reported in the North Country regional plan.
5:1
— Leveraging ratio of public to private capital reported in the Capital Region regional plan.
New York's fragmented economic development landscape includes 107 Industrial Development Agencies (IDAs) that collectively expend about $1.0 billion annually. To improve efficiency and oversight, these numerous regional agencies should be consolidated into single entities per region, while all economic development spending should be subject to standardized performance metrics and unified budgeting.
Recommendations related to Industrial Development Agencies (IDAs)
The six, eight, 10, 14, 19, or even 23 IDAs operating in each of the regions should be consolidated into one per region to streamline the organizational structure.
Regional councils should have authority over all state economic development resources, including those currently managed by fragmented entities like IDAs.
A Unified Economic Development Budget, including tax expenditures, subsidies, and local add-ons, should be prepared and released for each region to ensure all tax breaks and subsidies receive proper scrutiny.
To avoid giveaways, benefits should be paid retroactively based on firm performance rather than upfront.
All programs should be re-evaluated before new ones are funded to ensure ineffective economic development initiatives are not continued.
Key Data
$6.6 billion
— Estimated annual cost of incentives dispensed by hundreds of state and local entities.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
$1.8 billion
— Annual spending by seven state public authorities and six state agencies.
$1.3 billion
— Annual investment made by municipalities.
$1.0 billion
— Annual expenditure by 107 Industrial Development Agencies (IDAs) and New York City.
New York's economic development landscape is fragmented, with hundreds of entities, including over 100 Industrial Development Agencies, operating with limited oversight and coordination. To improve outcomes, the state should consolidate these entities, standardize performance metrics, and implement a unified economic development budget to ensure investments are based on merit rather than regional formulas.
Recommendations related to Industrial Development Agencies (IDAs)
To be fully effective, the councils should have responsibility and authority over all state economic development resources, not just a subset of selected programs.
A solution may be to consolidate Industrial Development Agencies into one per region and place them within the Regional Councils’ purview.
As ESD helps the new councils draw up their metrics it should make sure that consistent performance measures and standard benchmarks are used in every regional plan.
Benefits should be paid retroactively based on firm performance.
The ultimate goal should be the creation of a Unified Economic Development Budget.
All programs should be considered for elimination before the budget for economic development is increased.
Key Data
$6.6 billion
— Annual investment by New York's state and local governments in tax breaks and direct expenditures to spur economic development.
$1.0 billion
— Annual tax breaks expended by Industrial Development Agencies and the City of New York.
107
— Number of active Industrial Development Agencies in New York State as of 2009.
$1,189 million
— Total gross tax exemptions provided by Industrial Development Agencies in fiscal year 2009.
$496 million
— Total net of payments in lieu of taxes (PILOTs) for Industrial Development Agencies in fiscal year 2009.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
New York's economic development landscape is currently fragmented, with 115 Industrial Development Agencies awarding $300 million in local tax breaks annually without sufficient coordination or accountability. To improve outcomes, the state should implement a unified strategy that prioritizes transparency, requires measurable job creation, and eliminates incentives for businesses that would operate in the state regardless of subsidies.
Recommendations related to Industrial Development Agencies (IDAs)
Tax benefits and other incentives should go only to firms that actually generate quality new jobs in the state.
The well-documented failings of the now-expired Empire Zones program should be stamped out of any new economic development programs.
Benefits should not go to businesses that would be located here anyway, like "big box" retail stores, if they offer only low-wage jobs.
Firms should be monitored to ensure communities get tangible benefits themselves in return for their tax dollar investment.
The best way to assure that the taxpayer is truly getting "bang for the buck" is to require total transparency and accountability in the awarding of benefits.
There must be clear, publicly disclosed performance metrics and regular reporting on how businesses are doing in meeting their job and investment targets.
Benefits should be paid when job creation goals are actually met, not simply promised, and should be graduated to incentivize the creation of better, higher-paying jobs.
All economic development activities should be part of a coordinated state-wide strategy that makes targeted moderate investments to key industries in our communities.
New programs should start small so that we can learn what works and scuttle the rest.
A regional approach should include standardized applications and disclosures, and a statewide plan for targeting program dollars to areas and industries that have the greatest need.
Key Data
115
— Number of Industrial Development Agencies (IDAs) in New York.
$300 million
— Amount in local tax breaks awarded by Industrial Development Agencies each year.
more than $5 billion
— Amount of public money spent annually on economic development programs when the full array of business tax breaks is included.
New York State's 116 local industrial development agencies (IDAs) finance private projects to stimulate economic growth, yet they often lack transparent project evaluation criteria and face rare enforcement of performance agreements. To improve accountability and effectiveness, the state should mandate competitive selection processes and standardized evaluation criteria for all projects receiving tax-exempt debt benefits.
Recommendations related to Industrial Development Agencies (IDAs)
Local IDAs, in particular, should select projects based on a competitive process with standardized criteria for evaluation.
The appropriate legislative committee should conduct public hearings and prepare an annual report based on reliable data and sound evaluation methods to support a recommended allocation of tax-exempt debt.
Authorities given an allocation of tax-exempt debt should select among entities seeking the benefit based on criteria established in advance and in response to competitive proposals.
Key Data
$9.7 billion
— Total debt issued by Industrial Development Agencies in 2003.
$1.5 billion
— New York State's annual quota for private activity bonds in recent years.
$15 million
— Cost of a residential development project supported by a cost-benefit analysis in the Village of Green Island.
$5 million
— Cost of two projects approved by the Village of Green Island IDA without similar documentation.
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