Should Casinos Get Tax Breaks?

There are no ifs ands or buts about it – The biggest gift a developer in New York State will be awarded in 2014 is a license to operate a casino.

Unlike in other counties, if a gaming hall or two happens to be selected in Sullivan County it appears our Industrial Developmental Agency (IDA) wants to give them tax abatements as an extra added reward.

Legislator Alan Sorensen along with several of his colleagues claim that awarding such incentives are unnecessary, uncalled for, and in the long run could hurt our chances in getting casinos.

Legislator Ira Steingart who also chairs the IDA on the other hand argues that these tax abatements are necessary because it will allow developers to build larger projects and obtain necessary financing.

The Sullivan County legislature will tackle this issue next week and decide if such tax abatements are warranted and should be awarded.

By now we should all know that the purpose of an IDA is to promote, develop, encourage and assist in acquiring, constructing, improving, maintaining or equipping certain facilities, thereby advancing the job opportunities, health, general prosperity and the economic welfare of the people.

IDAs have enormous power in granting tax abatements and bonding. While mission statements and laws adhered to by IDAs have not changed, interpretation has. IDA’s were established thanks to a special act of the State Legislature to assist in economic growth.

There is a very serious question here – Should a resort destination that includes a casino be entitled to tax abatements? I think not.

Two Weeks ago developers plucked down a million dollars each along with their proposals in their chosen counties and no one lured any of them with tax incentives.

In fact, we did nothing before and after Proposition One passed to even seek out and woo all these developers to Sullivan County and then let them battle it out here.

We instead saw five potential casino developers bring their casino proposals to Orange County and another one to Ulster County without being lured with any tax incentives.

EPR/Empire Resorts was granted tax incentives prior to Proposition One for a project they were planning on part of the old Concord property. That project included moving the Racino and Monticello Raceway to the former Concord site. Empire Resorts has now stated that they might not be moving the racetrack or its Racino operations to the Concord location if they are awarded a casino license.

We must all ask – Should our IDA be in the business in awarding what appears to be corporate welfare to public companies and their executives who appear to be making a fortune in selling their stock and options?

Empire Resorts Stock Sales
EPR PROPERTIES Stock Sales

It is unheard of and unconscionable to grant developers and bankers who are striking gold and hitting the lottery with a casino license a tax incentive.

If a developer who is awarded a New York State gaming license cannot obtain financing to construct their project they do not belong developing such a resort destination in the first place.

We have four viable projects in the running and none should be labeled the frontrunner. If there were a leader, the Stockbridge Munsees would probably be the one to beat, they have been in this game for over a decade.

However, once Proposition One was passed the slate was wiped clean.

The argument that casino developers should be awarded tax incentives because it will allow them to build larger projects is pure bunk. All of the grandiose projects announced throughout New York State two weeks ago were based on no tax incentives.

In fact, the purpose for the State granting a casino license is to help a local economy.

Awarding tax incentives to developers who already paid a million dollars to get through the gate and announced their hundreds of millions of dollars in plans will make us look potentially irresponsible to the gaming commission. We could also lose points in their rating system.

The simple truth is that Sullivan County needs every tax dollar it can get. We need to repair our roads and infrastructure for these potential casinos and influx of people. We need to fund a new jail among many other important projects. We cannot afford to award tax abatements to casinos.

The IDA is one of the most misunderstood organizations servicing Sullivan County in part because people find it very hard to understand. Board members are continually attacked for awarding tax abatements and incentives to businesses – but that is their job.

IDA’s and similar type agencies operate throughout our country. It is a win win for any host community to attract businesses with incentives in order to create jobs and economic development. But, that should not be the case when it comes to casinos.

IDAs are public benefit corporations authorized by the Industrial Development Agency Act of 1969 and governed by the provisions of Article 18-A of the General Municipal Law.

Real property owned by the IDA is exempt from property taxes and mortgage recording taxes. Purchases made in support of approved projects are eligible for exemption from state and local sales taxes. They can directly issue debt.

As a community we must support all four of our casino resort destination proposals, and keep fighting for two. But, supporting tax abatements for them is sending the wrong message.

How do you feel about awarding tax abatements to potential casinos? Let IDA Chairman Ira Steingart know – contact him at ira.steingart@co.sullivan.ny.us or 845 807-0435.

 

Bill Liblick has made a name for himself on National TV Talk Shows where he spouted his outspoken views from the front row. Now he offers you his opinion every week in the “MOUTH THAT ROARS” Column in THE SULLIVAN COUNTY POST.