Montgomery IDA grants $1.8 million in tax breaks

By Laura Fitzgerald
Posted 7/3/19

The Town of Montgomery Industrial Development Agency (IDA) granted $1.8 million in net tax abatements in fiscal year 2018.

Six projects received financial assistance in fiscal year 2018: Kadge, …

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Montgomery IDA grants $1.8 million in tax breaks

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The Town of Montgomery Industrial Development Agency (IDA) granted $1.8 million in net tax abatements in fiscal year 2018.

Six projects received financial assistance in fiscal year 2018: Kadge, LLC, Polich Tallix, Hudson Heritage Federal Credit Union, Spruce Properties, LLC, United Natural Foods, Inc. and Goodwill Properties.

The IDA is a public benefit corporation that grants economic incentives to encourage job development, economic growth and the general prosperity of its constituents.

“We’re looking to keep the town viable with new business, employment opportunities, spreading of the tax base, to keep the town growing,” IDA Chair Jeffrey Crist said.

Project operators pay the Town of Montgomery, Orange County and Valley Central School District in the form of Payments-in-Lieu-of-Taxes (PILOTs). PILOTS are a portion of the taxes the project operator would have owed. The portion the operator pays increases each year.

Approximately $650,000 total PILOTs were paid in fiscal year 2018 to the town, county and school. The six projects received $1.8 million in tax abatements after their PILOTS were paid, according to Public Authorities Reporting Information System (PARIS) data.

About 80 percent of the tax abatements were granted to United Natural Foods, which was granted $1.47 million in tax abatements in 2018.

The number of jobs that were created as a result of tax incentives was 50.5 for four of the six projects, and the current number of full-time employees is 144. The property with the most jobs created was Goodwill Properties, with 23 jobs created. Polich Tallix and United Natural Foods did not provide employment information.

Crist said the cost of doing business in Montgomery is more expensive than most other towns, so the benefits the IDA offers offset the higher cost and attracts business to the town. More business means a higher commercial tax base, which lowers taxes for residents.

“It builds the future tax base so that more future companies are paying into that to spread the burden for all the residents,” Crist said. “At the end of the day it helps keeps our taxes lower with more business than without it.”

The IDA follows up with businesses to ensure they are keeping their promises and will rescind benefits if they are not. Crist said the IDA recently rescinded Pollich Tallix’s benefits after it violated the terms of its agreement.

The amount of PILOTs paid to taxing jurisdictions has remained relatively stable. In 2016, six projects received $1.95 million in tax abatements after approximately $640,000 in PILOTs were paid, according to PARIS data.

The decrease in incentives to projects for the Montgomery IDA is out of line with the state’s increase in tax incentives.

New York’s IDAs reported providing $751 million in net tax exemptions for 4,385 projects in 2017, the most recent reporting year available. That is up more than 5 percent from 2016, according to a report issued by State Comptroller Thomas DiNapoli.

“The need for close scrutiny of economic development efforts has never been higher,” DiNapoli said in a press release. “My office releases IDA data so New Yorkers can examine if incentives given out to create and retain jobs in their communities are worth it.”

Total net tax exemptions and PILOTs increased by $36 million from 2016. In 2016, net tax exemptions were up $20 million, nearly 3 percent, from the previous year.

Active IDAs produced a net total of almost 200,000 jobs gained since their inception. Services—such as retail, health care and recreation—accounted for 25 percent of total net jobs gained, followed by manufacturing (25 percent) and finance, insurance and real estate (20 percent). 

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