NY greenlights monitor to oversee Orange County agency that doles out local tax breaks

The Orange County agency that approves tax breaks for new and expanding businesses will soon face the scrutiny of an outside monitor, who could block those deals under a provision in the new state budget.

A budget bill passed late Tuesday night ordered the appointment of an independent monitor for the Orange County Industrial Development Agency, a small office with an unpaid board that grants property-tax reductions and other benefits for companies that plan to open or expand operations in the county.

The oversight measure was a coup for Sen. James Skoufis, the Cornwall Democrat who proposed and fought for it after years of conflict with the IDA over property-tax breaks he felt were unneeded or excessive. One recent target: last year's $32 million in total tax benefits for the Royal Wine winery and warehouse being built in Goshen.

"I'm delighted," Skoufis said in an interview before the Senate and Assembly approved the measure. "It's exactly what's needed."

His proposal was reworked in negotiations with Gov. Kathy Hochul's administration, specifying in the amended version that the monitor could reject tax benefits if they involve conflicts of interest or violate the IDA's own guidelines, known as its uniform tax exemption policy. That policy effectively becomes a "binding document" with a monitor holding veto power, Skoufis said.

"It addresses every conceivable concern that I or other critics could have," he said. "The monitor can step in when it's a bad deal. That's always been the motivation here."

Monitor proposal: NY Senate proposes state monitor for Orange County agency that grants business tax breaks

Bill Fioravanti, CEO of the agency, ripped the plan, saying by email it would allow the monitor to "nix our approvals based on their displeasure with any number of project attributes."

Requiring strict compliance with the tax-exemption policy is too rigid, leaving the agency "unable to deviate to meet the needs of a particular applicant like all IDAs are able to do."

"It’s pretty Draconian, to say the least, and will likely serve to keep developers away, not to mention Board members!" Fioravanti wrote.

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How will the state monitor plan work?

Under the budget terms, state Inspector General Lucy Lang must choose a monitor for the IDA within 90 days. That person will serve for three years and be paid by the IDA, using its $10 million pot of accumulated fees that companies have paid to apply for benefits.

Skoufis has railed against certain breaks as unfair to local taxpayers, particularly when the beneficiaries promised relatively few jobs or appeared likely to build even without the added incentive. The Royal Wine breaks, for example, amounted to a $582,000 taxpayer subsidy for each of the 55 new jobs it expected, he argued.

Fioravanti countered in that case that Royal Wine might have canceled its project if denied the benefits, and was offering more economic rewards than could be seen by looking solely at future staffing. Among them: several hundred construction jobs, mostly for local workers; a new employer for the region's food-and-beverage industry; and the addition of an eighth-generation family business with a loyal workforce.

Fioravanti has helped rebuild an agency virtually emptied by a scandal several years ago, when two former administrators pleaded guilty to fleecing the agency and its compliant board for escalating, exorbitant fees. They and a former board member wound up paying almost $1.3 million in restitution in 2021. County lawmakers replaced the entire board shortly after the criminal investigation began.

Chris McKenna covers government and politics for the Journal News and USA Today Network. Reach him at cmckenna@gannett.com.

This article originally appeared on New York State Team: NY budget: State monitor will oversee Orange County IDA