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 Special Bulletin for New York State Economic Development Officials
How the Tax Cap Legislation Could Substantially Impact IDAs and What We Can Do About It
Camoin Associates has identified a serious concern regarding the recently enacted New York State Tax Cap Legislation. In its current form, an IDA's use of a PILOT exemption to induce economic development can substantially lower the host community's maximum allowable levy under the law. Because of this unfortunate situation, municipalities and school districts may choose to withhold their support for economic development deals that involve a PILOT exemption.
We believe that this is an unintentional result of the language used in the law, especially since it runs contrary to the law's purpose: to help relieve the burden of local property taxes on New York State residents. By potentially suppressing economic development and the associated commercial tax base, more of the tax burden of government would be pushed onto residents.
In our memo, which can be found here, we explain that this negative impact is because property exempted under a PILOT is ignored for the purpose of calculating the community's Tax Base Growth Factor. Therefore, the solution is simple: the law should be amended so that the Tax Base Growth Factor includes the increases in both taxable property and PILOT-exempted property in a given year. We ask all economic development officials to contact their representatives in Albany and encourage them to make this important legislative change to the tax cap law.
Please click here to find the link to download the memo regarding this issue.
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