Op-Ed: Do Taxpayers Really Need to Give a Tax Break to a Luxury Hamptons Hotel?

by Steve Levy

The idea behind an Industrial Development Agency ("IDA") is to provide tax incentives for companies to locate on Long Island in order to add jobs and revenue to the community. It is designed to make it more attractive for a company to locate here when they otherwise would not.

Those incentives were used successfully in luring companies such as Computer Associates and Canon to Long Island, which brought with them thousands of new, high-paying jobs.

But, too often, we see various IDA's give breaks to car washes, parking lots or storage facilities. The kinds of business tax breaks that take tax revenue off the rolls, but provide only a very limited number of low-paying jobs. More scrutiny is needed.

And greater justifications are needed for projects that probably would have been built anyway.

For instance, the Suffolk IDA just signed off for preliminary approval on a proposal from a developer seeking $700,000 in tax breaks to erect a luxury hotel in Westhampton.

The developers predict it will provide only 14 jobs.

Has anyone proven that the Hamptons have been wanting for tourists?

The Hamptons have been booming for many years now. Entrepreneurs are investing throughout the Hamptons because they see that money - often a lot of money - can be made.

It’s difficult to fathom why a developer would need to be incentivized to create a hotel in a tourist Mecca such as Westhampton.

By contrast, Kudos to Nassau IDA for "clawing back" tax breaks that had been given to Amazon, after Amazon’s job predictions fell flat.

We have long called for "claw back" provisions that force IDA recipients to pay the taxes that were waived if indeed the predicted number of jobs created failed to materialize. That just happened, as Nassau held that Amazon must pay the county $11 million because their promise of 150 jobs never came about.

This type of follow-through and accountability exercised by Nassau County is essential, if the taxpayers are to have confidence in the IDA system.

--------------------------------------------------------------------------------------

Steve Levy is President of Common Sense Strategies, a political consulting firm. He served as Suffolk County Executive, as a NYS Assemblyman, and host of "The Steve Levy Radio Show." He is the author of “Solutions to America’s Problems” and “Bias in the Media.” www.SteveLevy.info, Twitter @SteveLevyNY, steve@commonsensestrategies.com