DiNapoli targets IDA reporting practices

The state comptroller's office will start suspending local industrial development agencies that don't report complete and accurate data.

Comptroller Thomas DiNapoli released a study Wednesday showing that many of the state's 116 development agencies are reporting project costs, job estimates and other information that's "inconsistent, incomplete and not independently verified." DiNapoli said his office will revoke an agency's powers to award tax abatements, tax credits and low interest rates to spur job creation and business expansions, if its reports are incomplete.

DiNapoli's audit furthers an ongoing debate over whether to reform industrial development agencies, which are independent public authorities. That question is fueled by two starkly different studies based on data reported by the agencies.

Earlier this month, the New York State Economic Development Council released a report saying that projects backed by the agencies topped job creation projections in 2005 by nearly 60,000 positions.

The report also said 45 percent of projects fell short of job creation targets. Many came up less than 10 jobs shy of those benchmarks.

The council hired the nonprofit Center for Governmental Research Inc. to complete the study to answer criticisms from another nonprofit: Jobs with Justice, a group in Washington, D.C. aligned with labor unions.

Last summer, Jobs with Justice issued its own report on industrial development agencies, using similar data from the comptroller's office. Its study said just 34 percent of promised jobs were actually created.

The audit from DiNapoli's office found many problems, such as industrial development agencies occasionally -- and inappropriately -- revising employment benchmarks from year to year, making it difficult to determine if job creation and retention goals have been met.

"IDAs are supposed to create jobs," DiNapoli said. "When they report on job creation, taxpayers should know that the numbers are right. Given the way IDAs are currently reporting information, there is no way of knowing that. These measures will make IDAs more accountable to the public they serve and establish clear standards that IDAs must follow, or they risk serious consequences."

The comptroller's findings include:

• IDA-supported projects grew by 16 percent between 2003 and 2006, 41 percent of this growth occurred in service-related projects. Manufacturing-related projects declined by 4 percent during this period. By 2006, IDAs were supporting $41 billion in projects, led by the New York City IDA with $14.7 billion in projects.

• In 2006, six IDAs accounted for 40 percent of all projects. Those IDAs include New York City (539 projects), Monroe County (348 projects), Erie County (305 projects), Town of Amherst (127 projects), Suffolk County (115 projects) and Nassau County (101 projects). The average IDA supported $246 million in projects, excluding New York City. Thirty-nine IDAs reported fewer than 10 projects in 2006, with six IDAs reporting only one project.

• IDAs claimed that cumulative employment grew by more than 228,000 jobs in the projects they supported by 2006. However, OSC found that IDAs did little to verify the accuracy of the information reported by individual employers. The annual cost per job created ranged from $0 to $121,818, with an average cost of $4,195.

The audit from DiNapoli's office also raises the idea of a regional structure for the state that could better plan economic development and help keep tabs on industrial development agencies.