Guest Column: Riverhead must get tough on IDA tax breaks

08/12/2013 2:00 PM |

When you drive Route 58, you shake your head and wonder how we even have town taxes. Every major chain calls Route 58 home. So, given Riverhead’s small population, how is it all of these meccas of commerce don’t throw off enough revenue to keep our taxes low? After all, Riverhead is the highest taxed, most indebted, poorest town on the East End. How can that be?

Because here in Riverhead, we give the store away.

When the national chains come a-calling, I don’t know whether they bring candy or flowers but the big guys always seem to have their way with us. Maybe we feel we are not worthy, maybe we are bad negotiators, but when it comes to granting tax breaks, Riverhead seems to roll over like a sea lion in the sun, leaving much-needed revenue on the table that could and should be adding to our tax base.

Take our Industrial Development Agency. Our IDA grants tax abatements like free smooches at the county fair kissing booth. New in town? Don’t want to pay taxes? You got it. Why do we give in so easy? Perhaps it is because our IDA director gets paid based on what the agency gives away. It’s hard to believe but the IDA director’s salary is generated by granting tax freebies. That’s as sensible as giving a raise to the bartender who pours free drinks. Tax breaks “Riverhead-style” are as lucrative as it gets. Our tax breaks are the 10-year kind. So that big box store being built today may not generate its fair share of revenue until at least 2023. I say “at least” because when they are ready to expire, we have been known to extend our tax breaks even longer, just to be neighborly.

The stores on 58 require heavy police protection, increased attention from our fire departments and a host of other services that strain our cash-strapped government to the breaking point. Those government services need to be paid for by someone — and that someone is you. You don’t like the traffic, clear cutting or ugliness Route 58 brings? You paid for it. In Brookhaven, Huntington and Islip, the commercial district subsidizes the homeowner. Here it seems the other way round. What to do?

One, performance audit IDA breaks. Are we really netting out the dollars we think we are? Let’s find out. Two, end Route 58 tax breaks. There was a time when 58 was barren. Today it’s the place everyone wants to be. Stop the giveaways. Tax abatements should instead be targeted to downtown, where we have trouble attracting suitors. Three, change the “IDA incentive.” It makes no sense to compensate an IDA director based on what he or she gives away. Retool the position to make it more results-driven. Let’s pay for net revenue in — not gross dollars out. Four, consider impact fees. When a chain wants to come here, not only should we not roll over and play dead, we should charge premiums. We should craft impact fees so that new box stores will pick up the costs of roads, traffic lights and other improvements. They do it in Florida and the Carolinas and California, why not here? Do you really think they’ll stop coming because we ask them to pay?

Right now Riverhead gets all of the bad and none of the good that comes from the parade of 58 box stores. Let’s stop giving the store away.

 Anthony Coates is a downtown resident who is running a Republican primary for a town council nomination.

Riverhead IDA sign

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