Suffolk IDA should claw back Canon's tax breaks

For more than a decade, Canon U.S.A., Inc. was touted as an economic engine that would make the most of the millions of dollars it received from Suffolk County's Industrial Development Agency.

But in recent years, Canon's business hasn't kept up with a changing world that isn't seeking many copiers or point-and-shoot cameras. Despite that, the Suffolk IDA has continued to prop up the company, granting Canon $7 million in additional tax breaks earlier this year. At the time, Canon pledged to retain its employees and improve its facilities. 

That didn't last long. Just months later, Newsday has reported that the company headquartered on a prominent corner of the Long Island Expressway service road has laid off between 100 and 150 employees, as much as 14% of its local workforce. 

In December, after the IDA provided a preliminary go-ahead on the latest tax breaks, the Newsday editorial board called the decision an "egregious precedent-setting move" and urged the IDA to "stop thinking from the past and start looking forward." Unfortunately, the agency did not take that advice. Now, the IDA is trying to determine whether the company violated the agreement — and whether the agency can claw back those tax incentives.

IDA officials have sent a letter to Canon executives and set up a meeting for next month. So far, Canon hasn't provided the agency with any official notice or details regarding layoffs. Company officials have suggested they might hire in "specialized" fields, without any indication of when that may happen or how many jobs it might include.

But there's little doubt that a layoff of this magnitude should be a violation of any IDA award. The IDA cannot allow companies like Canon to get away with taking taxpayer money while breaking promises. IDA officials shouldn't have agreed to the newer round of breaks in the first place; now they're paying the price and must claw back the funds. 

This situation also should teach IDAs across the region to establish stricter standards for the incentives they provide, and to limit approvals to companies and developments that deserve them. IDAs must keep up with the changing way we work and spotlight industries that will drive Long Island's future. The Canon conundrum also highlights a missing piece in IDA oversight. Agreements should include enforceable provisions that require companies to notify an IDA when they plan to lay off workers — and how many. Companies that downsize without notification should have their incentive packages revoked. Canon's lack of openness about the layoffs and its plans is particularly distressing.

This is a disappointing chapter in Canon's storied Long Island history. The company now must own up to the Melville workforce cuts and detail its future plans. It's up to the Suffolk IDA to hold Canon accountable, claw back the latest tax breaks, and commit to making better, more forward-looking decisions in the future.