Guest Spot: Don’t blame IDA for the mess you created

08/16/2011 10:07 AM |

Ida is a girl of my childhood. She was a character in a series of books called “The Adventures of Honey Bunch.” Ida had black hair, brown eyes, olive skin and wore hand-me-downs with rarely polished shoes; she was the exact opposite of Honey Bunch, the blonde, blue-eyed darling of the American Main Street. Everyone always pointed to Ida when something was amiss in the neighborhood, like a pie snatched from a windowsill, a dog let loose from its yard or a missing toy. Ida and Honey Bunch were the classic Christian dichotomy of white and light as good, and black and dark, evil.

My father never read the Honey Bunch books. He remained unaware of its lessons of quick judgment and damnation of anyone or anything unknown or different. But dad did believe that no one should be judged solely on appearance, and that finger-pointing is a big character flaw. What is needed is to listen, observe, gather information, eliminate gossip and then act. He also shared his observation that finger-pointing and trying to transfer blame to others was cowardly. Wise counsel then and now.

Recently another Ida caught my reader’s eye. And just like the Ida of my youth, this IDA [Industrial Development Agency] is viciously maligned without just cause. The misinformed statements made by Riverhead Central School District Board of Education representatives during the Aug. 1 IDA meeting can only be assigned to ignorance and failure to know their facts. Perhaps these individuals were hoping to lay the blame for financial shortcomings of the RCSD at the feet of little IDA, shifting the focus from them to IDA.

IDA is a public benefit agency, created in 1989 by Riverhead Town as a result of state law encouraging and promoting economic development in an effort to maintain a healthy commercial tax base. The intent of each and every IDA is simple: In the short-term (one to 10 years), capture business enterprises that might locate elsewhere or might abandon plans for expansion; in the long-term (10-plus years) , grow the commercial tax base in distressed areas across the state, slowly and consistently turning the property tax base for local governmental entities away from residential properties and to the commercial sector.

This intent is met with three common inducements: mortgage tax relief, building materials tax relief and local property tax relief.

The concept is to provide nascent and/or established expanding business enterprises the opportunity to retain a portion of their capital for operating purposes, including employee salaries and benefits as well as ongoing maintenance and repairs. Business enterprises and developers may apply for one, two or all three of these tax relief inducements.

Since its inception 30 years ago, the Riverhead Town IDA has supported about 22 projects (less than one per year), many of which have now exhausted their inducement benefits and remain in our town providing jobs and services. This means that a property formerly making PILOT [payments in lieu of taxes] payments for property taxes is now on the full property tax rolls. Since 2009 alone, IDA has returned four properties to full assessment and tax responsibilities.

Let me address some common misconceptions of IDA:

Myth: IDA gives away school tax dollars, hurting children in our public schools.

Reality: IDA cannot and does not give away what was never there to begin with. IDA allows nascent and/or expanding business enterprises a period of time to stabilize and be successful, using capital for operational costs that would not otherwise be possible. The town continues to collect property taxes on existing land and structures and collects an ever-increasing portion of the assessment and tax levy on improvements until 100 percent is achieved.

What does this inducement mean in terms of property taxes collected ? Consider you own a property and currently pay $14.87 in property taxes. You add a small shed to your property, increasing the total tax bill to $22.31. The property tax relief IDA allows you is only on the improvement and subsequent addition to your tax bill. You make PILOT payments on the $7.44 increase; you still pay the original $14.87. This $7.44 is reduced each year of the PILOT period until 100 percent of the property taxes is achieved. At no point in time does IDA vacate the obligation to pay property taxes.

Myth: IDA gives away school tax dollars, hurting children in our public schools.

Reality: This incorrect statement should not mislead taxpayers. Fiduciary responsibility for the district lies solely with the school board. If board members insist on giving excessive salaries and over-the-top benefits in their collective bargaining agreements — which, by the way, have not resulted in any student test performance improvements in the last decade — they have to accept that they are robbing our children of educational opportunities, and not point fingers at anyone else. How irresponsible and arrogant, to make the IDA a scapegoat when they themselves have been robbing the taxpayers for decades.
Salaries and benefits are not an absolute cost, but a cost agreed to by the school board and something board members can very much control. They make spending choices all the time. Remember this is a Board of Education expecting parents/taxpayers to raise extra money for student curriculum-related field trips, cutting the some $17,000 for buses, but still able to find $20,000 to pay a financial consultant. Who is truly hurting our children? The proof is in the spending.

Myth: IDA gives away school tax dollars, hurting children in our public schools.

Reality: Spending by the school district is like a bear running downhill, out of control, breathing heavily, and foaming at the mouth in expectation of reaching its target — the taxpayers’ pockets. The two board members who showed to the last IDA meeting need to do some homework about how to spend the tax dollars they have, and not what they expect to have by badgering public benefit agencies. They should attempt to effect responsible budgeting and spending, keeping the needs of our children first and foremost.
Bottom line, girls? Focus on the correct root cause of your fiscal concerns.

IDA is not the who, what, how, when, or why of your financial pickle.

Angela De Vito is a South Jamesport resident who recently stepped down from her position as school board member.