NORWICH – The possibility of keeping 27 jobs and creating nine more is worth giving a company a penalty-free tax break, members of the Chenango County Industrial Development Agency decided Tuesday.
However, according to a report released from former state Comptroller Alan Hevesi’s office in 2005, businesses getting tax breaks and other financial incentives – totaling over $6 million in relief – from the Chenango IDA have a history of not producing jobs.
In fact, as of 2004, the IDA’s 13 project companies have netted a loss of 20 jobs based on their employment figures before and after receiving tax breaks. IDA officials say that’s a result of the economy and not their practices, which are economically “beneficial.”
But as a standard practice, the companies aren’t held to any performance standards, the IDA admits, and don’t have to repay any money if they decide to cut jobs, divest in the business or close their doors.
“We probably don’t check back on them like we should,” said Wayne Outwater, one of five members on the IDA board. “We probably need to do a better job following up on these projects we put out there.”
At a special meeting Tuesday, four members of the IDA voted unanimously to award Wagner Lumber a 10-year, 50 percent tax reprieve – referred to as a payment-in-lieu-of-taxes (PILOT) agreement – that will save the company upwards of $161,000 in sales and property tax for purchasing a saw mill in the Town of Afton.
The vote came one week after Afton residents offered up a heated debate at a second public hearing on the subject. During that hearing, a handful of residents voiced their support of the Wagner PILOT, saying the company would keep and create jobs by taking over the currently-struggling Pomeroy Lumber saw mill, and be an asset to the community based on the company’s track record of operating successful lumber mills in Tioga and Schuyler counties. A host of residents, however, criticized the un-elected IDA for not making businesses meet job creation and investment requirements in exchange for tax exemptions, failing to adequately involve members of the Afton public in the IDA process and giving financial breaks to rich companies that don’t need them.
“If the IDA can give exemptions without verification, performance standards, transparent procedures, clawback provisions, and public oversight,” said Afton resident Mike Bernhard Tuesday night, “what distinguishes its operation from simple cronyism?”
As a result of the Wagner deal, Afton residents would see a .31 per 1,000 increase overall in school, town and county taxes combined in the first year of the 10-year agreement.
Town of Afton Supervisor Robert Briggs said that number would be offset, considering an expected reduction in town and county taxes.
“Supervisor Briggs said at the public hearing that since the county tax rate was falling by $.25 per $1,000 of taxable value, and town taxes were also going down by $.04 per $1,000, that the net effect was that taxes would rise by by a measly $.02 per $1,000 to make up for the abatement to (Wagner Lumber owner) Les Wagner,” Bernhard said. “That means the IDA’s decision has given the total tax decrease due to all of Afton’s property-owners – and then some – to one man.”
Wagner claims his purchase of the Pomeroy mill, located in Nineveh near the Broome County border, depends on receiving this tax break.
Chairman Hugh Kearney was the only IDA board member in attendance at last week’s public hearing to take comments for and against the proposal. As a result, Outwater and fellow board member Betty Bytheway initially said they would feel uncomfortable voting “yes” Tuesday on the Wagner PILOT, having not read beforehand the report of public comments given by Afton residents at the hearing.
“They (Wagner) have got a seller who’s chomping at the bit,” IDA Attorney James Downey notified the board. “They need a decision out of this board today.”
