JCIDA's game of chicken
The Jefferson County Industrial Development Agency has decided to play a game of political chicken with the county Legislature, essentially refusing to consider any of the requests made by legislators who are unhappy with JCIDA’s proposed Galloo Island Wind Farm payment-in-lieu-of-taxes agreement.
Members of the agency might want to hope this doesn’t turn into a game of Russian roulette. It’s a certainty, in a showdown between JCIDA and the Legislature, that the chamber with the bullet in it is pointed at the agency’s head.
By their response to questions and requests raised by legislators, it’s apparent the JCIDA board is unwilling to suggest any changes in the unusual PILOT agreement it has proposed for the wind farm’s developers. It remains at 20 years, a third longer than the standard 15-year term, it continues to offer a full sales tax exemption that will send ripples far beyond the three taxing jurisdictions affected by the PILOT and it continues the non-standard distribution of payments.
Many members of the Legislature are concerned that by offering the Galloo Island project a customized PILOT, it is inviting other developers of wind farms and other projects to demand special favorable terms for future projects. In fact, when the Legislature put the development of the wind farm PILOTs in JCIDA’s hands, it was expressly done to avoid agreements that may be all over the lot in terms of benefits to companies at the expense of taxpayers.
And make no mistake — a PILOT agreement is corporate welfare paid for by local taxpayers. Some legislators have suggested spreading the PILOT’s payments out to other affected municipalities, as though such an arrangement would somehow share the wealth. All that would in fact do is deepen the pain for the host community. Under these terms, there is no host community benefit; there is only the ability of the host community to subsidize the developers already being subsidized by state and federal taxpayers.
As Legislator Scott Gray has pointed out, a recent offer by the Galloo Island Wind Farm developer to shorten the PILOT by two years indicates the county, town and school district will be leaving money on the table if the current proposal is adopted. Yet, JCIDA didn’t seem to get that. And it is obvious by its memo of explanation to the Legislature that it either doesn’t get, or chooses to disregard, the desire of many legislators to have a uniform PILOT agreement that can be applied to all future proposed wind farm developments.
JCIDA seems to be deeply influenced by Upstate New York Power Corp.’s constant message of urgency. The implied threat from the company is that without an immediate and favorable PILOT, it will go away, and the agency has almost turned itself inside out to accommodate the company’s request. This allows the supplicant to set the agenda, and puts the JCIDA and the taxing jurisdictions at a distinct disadvantage. The dissatisfaction with the PILOT largely is the result of that.
Now, the agency will force the Legislature to vote on a PILOT agreement that many members are not all that happy with. It has created a confrontation where none was necessary. Even if the measure passes, JCIDA will lose because it will have created ill will with a number of legislators. If it does not pass, the agency will look foolish. For JCIDA, this is truly a case of heads I lose, tails you win.
