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Teachers, parents and schools urge NY to restrict economic development tax breaks

New York State United Teachers
/
Flickr

More than two dozen teachers' unions, education leaders, and government watchdog groups rallied at the New York State Capitol on Wednesday to oppose tax revenue being diverted from schools due to tax breaks issued to spur economic development.

The groups urged the state Senate and Assembly to pass bills S89/A351, which would limit or prohibit local Industrial Development Agencies (IDAs) from giving tax abatements that impact property tax revenue, of which a portion funds nearby school districts.

IDAs, which are made up of business executives, lawyers and former lawmakers appointed by local government, are allowed by the state to buy, sell or lease property and to provide tax exempt financing for approved projects in an effort to promote jobs and economic growth.

A financial analysis published in February 2023 by watchdog group Good Jobs First found that public schools in New York lost more than $1.8 billion in local tax revenue in the 2021 fiscal year due to tax breaks granted by IDAs. According to the study, New York schools lose more money to IDA tax abatements than any other state in the U.S., three times more than the second-highest losing state, South Carolina.

“These tax breaks allow for private companies to come in and create demands on our school systems while avoiding the financial responsibility of supporting our students and educators,” said Melinda Person, president of New York State United Teachers, the state's largest teachers' union representing more than 700,000 members.

Greg Wallace, Riverhead Central Faculty Association president from eastern Long Island, said schools have been underfunded for too long and that local IDAs need to be held accountable.

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"It's important to recognize that IDAs have the unilateral authority to change enacted tax policy while completely ignoring the concerns of elected school boards," Wallace said. "Furthermore, they do this without any accountability to the electorate. For years, the IDAs have operated in obscurity. IDA meetings are the quintessential smoke-filled room which is antithetical to the democratic process."

According to Wallace, the Riverhead IDA granted more than $23 million in tax breaks throughout the town, resulting in $2.7 million being diverted away from the Riverhead Central School District.

In an open letter sent to state legislative leaders, the groups pushed lawmakers to put the well-being of education quality above that of corporate enterprise.

"New York is better than this. States like Florida, Alabama and Louisiana have already passed laws that prevent unelected local development agencies from abating tax revenue that would otherwise fund public schools. The best investment of New York’s public tax dollars is in public education, not corporate giveaways," advocates wrote in the letter.

State Senator Sean Ryan (D-Buffalo), who introduced bills along with Assemblymember Harry Bronson (D-Rochester), said that the tax abatements provided by IDAs fail to create the economic growth they promise.

"While we're busy making these massive investments in public education, there is a hidden problem, exacerbating school budget gaps," Ryan said. "Year after year, IDAs across the state give corporate handouts that cost New York State's school districts millions and millions of dollars.”

On Long Island, millions of dollars in tax breaks have been approved to help support economic development, including $8 million to help camera-maker Canon expand in Melville and $2.7 million for proposed The Enclaves hotel in Southold from the Suffolk County IDA.

In November, the Brookhaven IDA paused approval of financial assistance for the building of so-called warehouses of more than 100,000 without having tenants already approved. The corporate municipal board is reviewing how fast developers have been able to fill these move-in-ready facilities after a flurry of new builds were approved on Long Island and the rest of the U.S.

Bill Rodrigues is a graduate intern at WSHU.
A native Long Islander, J.D. is WSHU's managing editor. He also hosts the climate podcast Higher Ground. J.D. reports for public radio stations across the Northeast, is a journalism educator and proud SPJ member.