February 21, 2008
 

ENVIRONMENTAL WATCHDOG SHINES LIGHT ON NEW YORK’S PERVERSE TAX CREDITS, SPRAWL SPENDING 

 ‘WASTED GREEN’ REPORT DESCRIBES HOW LOST REVENUE & STATE SPENDING SHORTCHANGE TAXPAYERS, ENVIRONMENT

(ALBANY, NY) – Environmental Advocates of New York released a new report today on three examples of state spending and tax credits gone wrong. Wasted Green: How Lost Revenue & State Spending Shortchange New York Taxpayers & the Environment shows how the state’s Brownfield Tax Credits are exposing New York to more than $1 billion in lost revenue; the Empire Zone Program, intended to stimulate economic development in distressed communities, has become a corporate welfare program subsidizing one of the state’s worst polluters; and New York’s Drinking Water State Revolving Fund, created with the best of intentions, may be working at cross-purposes to efforts to fight sprawl.

“Environmental Advocates of New York is calling on Governor Spitzer and the State Legislature to stop wasting green and start acting green. It’s time to rethink New York’s fiscal policy and better protect taxpayers, as well as the health of our air, water and land,” said Robert Moore, executive director of Environmental Advocates of New York. “Wasted Green gives three examples of how state spending is squandering taxpayer dollars. And in light of the state’s projected out-year budget gap, it makes sense to save money by reforming tax credits under New York’s Brownfield Cleanup and Empire Zone programs, and better scrutinizing who receives low-interest loans under the state’s Drinking Water State Revolving Fund.”

Fixing the tax credits under the Brownfield Cleanup and Empire Zone programs, and re-thinking how loans are doled out under the state’s Drinking Water State Revolving Fund, are especially important as the Governor’s Executive Budget proposal includes sweeping more than $100 million from New York’s Environmental Protection Fund to the general fund. Rather than balancing the state’s budget on the back of already overstretched environmental programs and agencies, Environmental Advocates of New York urges the Governor and the State Legislature to look elsewhere. In particular, our leaders should take a hard look at programs wasting taxpayer dollars and operating at cross-purposes to environmental policy goals.

Under the current Brownfield Cleanup Program, developers and not communities are reaping the benefits of millions in tax credits. According to the New York State Division of Budget, more than $1 billion in tax breaks may go to just 54 developers. Because tax breaks are based on redevelopment value, rather than cleanup cost, sites with the least contamination and the highest redeveloped value get cleaned up and contaminated sites that would most benefit from redevelopment are left dirty and undeveloped. For example, one site in Manhattan that was cleaned up to make way for a high-rise apartment complex is slated to receive more than $140 million in tax credits—seven times the cost to prepare and clean-up the site. Environmental Advocates’ recommendations to reform this program are to disconnect eligibility from tax credit eligibility.

Wasted Green also calls attention to the Empire Zone Program. Our research uncovered that three NRG Energy power plants have received $88.7 million in state tax breaks. We also found that NRG received these tax breaks while the state was suing the power producer for spewing more than three million tons of climate-altering pollution into our air. Recommendations for fixing the Empire Zone Program include ensuring companies that have violated state and federal environmental requirements, or other health and safety standards, are not eligible for tax benefits. We also want the program to meet its mission to create jobs.

The last section of the report is focused on New York’s Drinking Water State Revolving Fund. This loan fund may be subsidizing sprawl. Our research uncovered that communities with declining populations may be using low-interest state loans to build water lines to undeveloped areas, thereby encouraging poorly planned development. For example, the Monroe County Water Authority applied for a $21 million loan to build a new intake facility, despite the Authority’s ample water capacity and the county’s stagnant population changes.

Environmental Advocates is calling on the state to take a closer look at applications to the Drinking Water State Revolving Fund and to make sure that only those proposals that address a legitimate environmental or health concern get funding. For more information, or to access the complete report, visit www.eany.org.

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Environmental Advocates of New York is the state’s government watchdog, holding lawmakers and agencies accountable for implementing policy that protects natural resources and safeguards public health. Environmental Advocates works alone and in coalitions, and has more than 7,000 individual and 130 organizational members. The 501(c)(3) is also the New York affiliate of the National Wildlife Federation. For more information call 518.462.5526 or visit www.eany.org.