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04282005
Clearly Understood Tax Incentives are Better for Business
The local media recently has reported on a new uniform policy for providing tax incentives for economic development in our region. This new policy, the result of a sustained effort by the Buffalo Niagara Partnership in collaboration with regional Industrial Development Agencies, provides greater clarity and uniformity to a tax abatement system that was out of date, confusing, and not consistently followed – raising the uncertainty of businesses and not always helping the regional economy.
The Partnership worked for nearly four years to achieve this policy reform – as a key component of our NOW initiative -- because our nearly 3,000 member companies have demanded a more customer-friendly, development-savvy and coordinated delivery system for local development projects.
This breakthrough is central to the Partnership’s mission of undertaking “actions to expand private sector jobs and stimulate investments” in our region. Now, we will see targeted, collaborative efforts to help employers in key sectors not only grow their businesses, but, more importantly, create new job opportunities for the region’s workforce.
Instead of providing tax incentives to stimulate strategic investments and the creation of jobs, the old system lavished tax abatements without sufficient consideration of the impact such largesse would have on the overall community. In fact, one outcome of what was probably a too-liberal distribution of tax breaks has been a greater tax burden on citizens throughout our region.
The new eligibility requirements for tax abatements are clear. From for-profit medical facilities, retail projects, and hotels to professional service businesses and neighborhood development projects, the rules have been set and the policy for implementing them will be followed by all the IDAs in the region.
For instance, in developing a new hotel, no longer will incentives be provided just because the hotel is proposed for a particular location. Under the new policy, the hotel must be tied to some regional attraction or perhaps a convention center – a development synergy that attracts outsiders, brings in new investment and, again, the key factor: creates new jobs and net community wealth.
The next step in this NOW initiative is to have these tax abatement incentives also tied to regional land-use planning and related target industries, which will help guide development and investment to where it’s truly needed in our region. We expect to see this happen within the next six months.
All of our members should be pleased that their determination to affect change in our region is gaining increasing traction. Successes such as the new tax abatement policy demonstrate clearly that we are on the right course.
Sincerely,
Andrew J. Rudnick
President & CEO
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04282005
