The IDA should be very, very wary of trying to thwart the will of the Legislature. Important development decisions such as these, which have long-term ramifications for the entire county, should not be made by a board that was never elected by the people.
The ongoing tension between members of the Jefferson County Legislature and the Jefferson County Industrial Development Agency appears to be heading for an explosion, if the IDA’s proposed changes to its Uniform Tax Exemption Policy are enacted as now proposed.
The boiling point will be reached if the IDA attempts to place alternative energy projects – commercial wind projects, primarily, but potentially big solar projects as well – within the umbrella of projects that do not need the approval of their taxing districts to be granted local tax exemptions.
The Legislature recently approved a policy that would require any commercial wind projects that apply for a payment-in-lieu-of-taxes agreement to pay the full share of county taxes based upon the project’s assessment. That is in direct opposition to the IDA’s proposed new exemption policy, no matter how you examine it.
The Legislature’s position was based on the realities of commercial wind projects. They are already heavily subsidized at the state and federal level, and any further exemptions mean that local taxpayers are subsidizing them yet again.
The Legislature also recognizes that once the construction flurry has passed, virtually no local jobs are generated by these projects. The Galloo Island project, for example, is not going to have a large staff of workers climbing all over the island, tending to towers. At best, it will employ a handful of people. Most of the real work on the towers likely will be done by contract labor who will parachute in, do their specialized work and then head for the next job somewhere.
Donald Alexander, CEO of the IDA, has a different view which he has articulated several times in the past. Mr. Alexander believes that commercial wind projects are a major economic boost to the north country, primarily in the form of PILOT payments. He does not seem to consider the position that these payments are actually heavily discounted and remove money from the community that would otherwise be at play.
At this juncture, there is considerable confusion. Three IDA members we spoke to about the new policy had different interpretations of its effects. Chairman Donald Converse said large wind projects will be exempt from a new policy because of their size.
Treasurer Michelle Pfaff said they would be exempt because towers are almost all placed on leased land, presumably making it difficult for the IDA to take title to the project during the duration of a PILOT.
Jeremiah Maxon, a county legislator on the IDA board, said the policy would apply only to hydroelectric, photovoltaic and biomass projects.
So the policy that emerges may not be the policy that Mr. Alexander resurrected last week.
The final assessment of the change will have to wait until than.
But the IDA should be very, very wary of trying to thwart the will of the Legislature. Important development decisions such as these, which have long-term ramifications for the entire county, should not be made by a board that was never elected by the people.
Legislature Chairman Scott Gray is waiting to see what emerges from the IDA’s debate on the new uniform exemption policy before he makes any comments on it.
But he did say this: “I’m opposed to any revision to the UTEP that draws it further away from elected officials.”
We all should be opposed to that.
In this potential clash, the Legislature is holding all the cards, and the IDA would do well to recognize that.
Perry White is managing editor of the Watertown Daily Times.
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