New York State Senator James Skoufis announced the launch of an investigation into Medline’s efforts to secure tax breaks at a press conference on Tuesday morning.
The investigation will be part of the Senate Investigations and Government Operations Committee’s—which Skoufis is chair of—broader investigation into public authority and Industrial Development Agency (IDA) practices.
“Our investigation will soon be sending out document requests to Medline, the Town of Montgomery IDA, the Orange County Partnership, and every entity Medline has engaged with on the tax break issue,” Skoufis said. “Our investigation will seek to identify Medline’s—and others’—true rational for the proposed Payment-in-Lieu-of-Taxes (PILOT), why they abruptly abandoned the Orange County IDA to pursue incentives from the Montgomery IDA, and what, if any, impropriety was committed during this process.”
Medline requested approximately $17.6 million from the Town of Montgomery IDA for real property tax exemptions over a 15-year PILOT and $8 million in New York State sales tax exemptions, according to their application for assistance with the IDA. Tax benefits will be granted or denied only after the project receives final planning board approval.
Skoufis said his investigation will also look into Medline’s decision to relocate just as their PILOT for their facility in Wawayanda expires. Company officials say Medline is relocating to the proposed 1.3-million-square-foot facility in Montgomery because they have overgrown their current 500,000-square-foot facility in Wawayanda.
Medline negotiated a Payment-in-Lieu-of-Taxes (PILOT) with the Orange County IDA for its facilities in Wawayanda in 2008. The final year of the county and town tax PILOT is 2019 and the final year of the school PILOT is the 2018-19 school year.
“Now, as they’re about to start paying their full property tax bill, they decided to pick up their stakes, relocate and attempt to start a whole new set of tax breaks,” Skoufis said. “This, my friends, is nothing short of a scam.”
Skoufis referenced Medline’s profits with and without a tax incentive, as outlined in Medline’s application for assistance with the Montgomery IDA, as evidence of corporate greed. In the first year, Medline is projected to make approximately $76 million with tax incentives or $74 million without tax incentives.
“This isn’t a business in need of an incentive in order to make their business model workable—this is a greedy corporation seeking to milk Montgomery’s taxpayers for all they’re worth in subsidies,” Skoufis said.
Skoufis has not contacted Medline because he said his office did not see a need to. The first public records requests were sent on Friday.
Chris Ludlow, Coordinator of Southern Region Three for CSEA Local 1000, expressed his support for the investigation. CSEA is a New York-based labor union.
“We’re never against creating private sector jobs,” Ludlow said. “What we are against is taking advantage of taxpayers. And what we have here is a perfect example of a wealthy company, a successful company, trying to take advantage of Town of Montgomery and Valley Central School District taxpayers. We won’t stand for it; we back Senator Skoufis.”
Town of Montgomery resident Cheri Zahakos called on Medline to pay their full tax bill.
“Why should I or any resident of the Town of Montgomery bear the burden of the corporation’s tax breaks?” Zahakos said. “As a resident I am aghast to witness the abuse of the Montgomery IDA using our tax dollars to this end. Should Medline decide to go forward, then they should pay the entire tax bill, as every citizen is required to do.”
Skoufis ended with the line printed on his and many attendees’ t-shirts, in reference to his remarks at a packed public hearing for Medline on Aug. 13.
“Pay your damn taxes,” Skoufis said.
Calls to Medline for comment were not returned as of Tuesday evening.