Long Islanders get burned by foolish tax breaks for businesses

Suddenly, with October property tax bills in the hands of enraged residents and an important election for the State Legislature coming, the Town of Hempstead is railing at its own industrial development authority because of foolish tax breaks for a $79 million renovation of the Green Acres Mall.

Residents of Valley Stream school districts 13, 24 and 30 are facing annual property tax hikes averaging between $322 and $758. The outcry is too little too late for the taxpayers, but this might be the perfect example to spur IDA reform in Albany next session.

State law bars IDA tax breaks for retail establishments, but the mall was awarded a $6 million sales-tax exemption and a 10-year property-tax reduction in 2014. The loophole? Because it is near Queens, the mall can claim it is a “tourist destination” because it brings more than 51 percent of its customers from outside of Nassau County.

No one raised much fuss until property owners got their first bills reflecting tax hikes to make up for the multi-million dollar decrease in what the mall would otherwise pay. Now Assembly and Senate members and candidates, Hempstead Supervisor Anthony Santino and town board members are up in arms. Santino demanded that the IDA revisit the deal, and says the town is filing a lawsuit to overturn it. He also will call for replacement of the full seven-member IDA board at the town’s Nov. 15 meeting. It’s so easy to smell when politicians are running scared.

But for all the farcical expression of shock about what goes on in these sweetheart deals, it’s unlikely to right the wrong. IDA executive director Fred Parola says it’s too late to rescind the deal.

The current IDA structure is a disaster. Because IDAs are funded by the fees of applicants for tax breaks, they have an incentive to grant them. Again and again, Long Island’s eight IDAs give breaks to businesses such as storage facilities and gyms that can’t possibly move away, and which do little to enhance local economies. Homeowners and businesses pay enough taxes; they shouldn’t have to pick up the tab for others who work a rigged system to get a better deal. — The editorial board

Correction: The Green Acres Mall did not receive an exemption for mortgage recording taxes. The editorial has been updated to remove that benefit.