Economic officials relieved proposal didn’t pass

JOHNSTOWN – Local economic development officials are relieved a state proposal to restrict industrial development agencies’ ability to offer sales-tax exemptions died during state budget negotiations.

A two-county group of business leaders earlier this month formally objected to the state proposal.

Fulton County IDA Executive Director James Mraz said this week the governor’s proposal was not included in the state budget.

Fulton and Montgomery County CEO Roundtable member Dustin Swanger said Wednesday it was important to protest the proposal.

“We need to have the IDA continue to maintain some kind of authority,” Swanger said.

The roundtable on March 6 formally sent out lobbying letters opposing the state proposal to restrict any IDA’s longstanding state authorization to abate the state portion of the sales tax on eligible economic development projects. The proposal was included in Gov. Andrew Cuomo’s proposed 2013-14 state budget.

According to the Fulton County IDA website, the agency offers exemptions from sales taxes on eligible materials purchased during construction and for eligible equipment for projects.

“The sales tax exemption has been an important incentive used by economic development organizations in the Fulton and Montgomery County region to attract new private investment and jobs into the region,” the roundtable letter stated. “The sales tax exemption on construction materials and eligible equipment has helped companies secure critical project financing.”

The letter added the proposal would be “detrimental” to local economic development efforts and create “uncertainties” in the development process.

Mraz said state lawmakers decided not to include the proposal in the state budget that was being assembled this week. The Legislature gave final approval to the 2013-14 state budget Thursday.

“The good news from the IDA’s perspective is the provision is not being put in,” Mraz said.

The state authorizes IDAs to provide an 8-cent sales tax exemption – 4 cents for the state and 4 cents for Fulton County.

But Mraz said that would have been replaced by a “whole series” of requirements related to the IDA’s continued ability to provide sales tax exemptions to companies that would involve much more paperwork.

The CEO Roundtable had argued the requirement would have restricted eligibility to only those businesses that qualify for Excelsior Job Program benefits, and that would have hampered economic development in small rural counties like Fulton and Montgomery.

Michael Anich covers Johnstown and Fulton County news. He can be reached at [email protected].

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