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Buffalo News on IDA Reform: Fishing for Minnows, Ignoring the Whales

In an editorial published Thursday, the Buffalo News takes to task the Erie County Industrial Development Agency for approving $49,000 in tax breaks for the construction of a Family Dollar store on a Seneca Street site that requires environmental remediation. They are right to do so, and I agree with their objection to the use of tax subsidies to promote retail and restaurant projects:

None of those projects generates new wealth for the region. They just give residents different places to spend their money.

Certainly, $49,000 in tax breaks for developer Dave Pawlik’s $1 million project (hey, remember when he was in charge of Buffalo’s spectacularly unsuccessful, HUD-funded lead abatement program?) or $131,000 in tax breaks for two new restaurants Rocco Termini has planned for Ellicott Street (what wouldn’t you pay for a renovation of the Golden Swan’s restrooms?) are abrogations of the ECIDA’s purpose, which is to support new economic activity and thus create new jobs in the region. But those grants are picayune compared to some ECIDA has made.

For example, a year ago, we reported on ECIDA’s granting of tax breaks worth more than $1 million to WNY Urology Associates, an cancer treatment center headed by Dr. Kent Chevli, who is a personal friend, neighbor, and campaign donor to Erie County Executive Chris Collins. WNY Urology Associates itself has given $11,000 to Collins’s campaign fund, including $5,000 in July 2009, while its application for tax breaks was before ECIDA.

WNY Urology Associates sought this assistance in order to purchase and house a new linear accelerator that will put it in direct competition with Roswell Park Cancer Institute. (Roswell expressed its objections in a letter to the ECIDA.) Simply, ECIDA gave one medical outfit with close ties to Chris Collins—who exercise great influence with the ECIDA, and whose good friend Phil Ackerman is its chair—a grant that will help it to compete with another medical outfit in the same region.

How does do anything but shuffle customers from one existing business to another? How does that shuffling add to the net economic activity and jobs available in the region?

Giving $49,000 to the developer of a Family Dollar is a mistake, but in its editorial opposing that grant, the Buffalo News is fishing for minnows. Giving $1 million to a company fronted by a friend of the county executive is a great, white whale. Someone needs to chuck a harpoon in that thing.


  • KeepItSimple

    >How does do anything but shuffle customers from one existing business to another? How does that shuffling add to the net economic activity and jobs available in the region?

    Why protect Roswell, a NY State agency? Why not encourage competition? I urge donors and public funding sources to require that Roswell exhaustively study environmental carcinogens and their link to cancer—in this case, disparate rates of exposure to said contaminants based on race. We need more research into true prevention—the direct causes of cancer—and not just the ‘usual suspects’ like tobacco and tanning beds. Otherwise, “let the best man win” in the competition for resources.

  • Jeff

    This is why we need public financing of election campaigns, not only on the federal and state level, but locally as well. When wealthy campaign contributors donate to someone’s election campaign, they get special favors in return. Instead of doing what’s best for their constituents, politicians do what’s best for their campaign contributors.

    These IDAs hand out tax breaks to their politically connected friends, and anyone who doesn’t have connections ends up paying more. The more than $1 million in tax breaks that WNY Urology Associates received have to come from somewhere, and they come from everyone else who pays taxes. IDAs are part of the problem, they don’t create new jobs, and they increase the tax burden on those who don’t know the right people. IDAs are part of the problem and they have to go.

  • Uncabobbo

    If we examine IDA operations with a regional, statewide or national eye I think you will find tht almost all of the activities of these agencies contribute proctically nothing but a shuffling of jobs, from one restaurant to another, one town to another, one region to another and one state to another. The actual creation of additional net jobs is almost non-existent.

  • Carmen Bartolotta

    Great point on the minnow vs. whale thing. Collins is indeed running the county like a business. Collins follows the business model being practiced today in Erie County government: cut jobs and maximize profit, while crushing labor and driving down wages. After you accept all of the handouts from the federal government (e.g., stimulus funds), you pay back your shareholders (big donors like Harris Beach and WNY Urology Associates) with the money produced by your workers (taxpayers). And we wonder why Chris Collins has almost $2 million in campaign cash to air fraudulent commercials.

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