The Nassau County Legislature approved a $2.9 billion 2017 budget last week — with $70 million less in revenue than expenses.
The Nassau County comptroller’s office issued subpoena’s last week to the Hempstead Town Industrial Agency and two Hempstead Town officials regarding tax breaks the agency granted to Green Acres Mall.
The two actions are not unrelated.
Year after year, Nassau — one of the wealthiest counties in New York State — has used all kinds of gimmicks in what are usually unsuccessful efforts to balance the budget without raising property taxes.
This year that effort features a proposal by Nassau County Executive Edward Mangano to impose a $105 traffic ticket surcharge known as a “public safety fee.”
This in a county in which red-light tickets currently carry a cost of $95 and most other tickets, from parking violations to illegal turns, cost between $110 and $225 – without the fee.
In a moment of legislative responsibility, Republican county legislators rejected the proposed $105 ticket surcharge.
Unfortunately, it was just a moment and the Republican legislators went ahead and approved the budget anyway.
The Republican legislators said they would get to the part of having revenues equal expenses at a later date.
Unimpressed, the chairman of Nassau’s control board directed Mangano to produce three separate contingency plans by Nov. 16 to reduce next year’s operating expenditures by as much as $100 million.
At least part of the county’s problem in getting revenue to equal expenses may lie the tax breaks given to businesses by not one, not two, but three industrial development agencies — the Hempstead Town Industrial Agency, the Nassau County Industrial Development Agency and the City of Glen Cove Industrial Development Agency.
The industrial development agencies are intended to spur economic development by granting exemptions to businesses on property taxes as well as mortgage recording taxes and, in some cases, exemptions from state and local sales taxes. In return, the businesses agree to payment-in-lieu-of-taxes agreements, or PILOTs, to offset some of the money saved.
The tax breaks, it is said, permit projects that create jobs and spur developments to move forward that would otherwise be too costly for businesses to otherwise undertake.
In many instances, this may be true.
But when some businesses are given tax breaks everyone else — residents and businesses — must make up the difference. Or else you get an unbalanced budget.
In the case of the tax breaks given to the Green Acre Mall’s owner, California-based Macerich, the millions in tax breaks given by the Hempstead IDA in 2014 on the company’s $79 million renovation project resulted in tax increases ranging from 4.6 percent to 12.2 percent for residents of Valley Stream, according to Nassau County Comptroller George Maragos.
Ken Volk, senior vice president at Macerich, issued a statement saying that the company’s investment “stabilized” the mall and preserved “nearly 3,000 jobs,” according to a story in Newsday.
Volk, according to Newsday, went on to say that the project creates “670 new union construction jobs, increases the sales tax revenue, and has already made a number of critical safety and infrastructure improvements and brought new stores and more visitors than ever before.”
Left unsaid were the number local retail stores — many of whose owners live in Nassau County — were or will be hurt and even forced to close because of their subsidized competitors.
Officials routinely call the small mom-and-pop stores the backbone of the community. But the tax breaks usually go to the big guys.
Adding insult to injury, these small businesses are often the ones who as both residents and business owners make up for the revenue lost by the tax breaks.
Also left unsaid is why, if the upgrade was so important to the mall why the owners invest their own money in the improvements. Or sell the property to someone who would.
Under public pressure, the Hempstead IDA last week commissioned a cost-benefit analysis of the mall’s tax breaks.
While the Hempstead clearly has this backward, it is actually more than what most IDAs across the state do.
And Green Acres is not the only development to receive tax breaks and the Town of Hempstead not the only IDA to issue them.
The Nassau County IDA has given tax breaks to a Roslyn car dealership, luxury apartments in North Hills and a luxury senior facility.
In the case of the luxury senior facility, the IDA was poised to grant a second round of tax breaks until Great Neck and Herricks school officials as well as the Village of North Hills and then county Legislator Judi Bosworth intervened, noting that the second round of tax breaks would do nothing for economic growth and cost them much-needed revenue.
The state Legislature, which regulates IDAs, has tightened supervision of local agencies in recent years.
That’s not enough. It’s time the Legislature requires a cost-benefit analysis on all IDA projects to see if the benefits actually outweigh the costs.
Perhaps then, the county might even balance its budget.
Our Views: Tax breaks cost revenue
