by Steve Dwyer
State lawmakers regularly face tough fiscal decisions with their annual budgets—where to generate revenue and where to trim expenses.
With much at stake impacting economic, environmental and social prosperity in New York State, The Brownfield Coalition of the Northeast appealedto New York state Legislators to eliminate a 2018-19 Executive Budget proposal to defer tax credit payments currently available under the Brownfield Cleanup Program.
BCONE has deep concerns about how the proposal will impact its New York-based members and all other members who conduct business in the state. More broadly, the budget proposal could serve as a dangerous precursor to motivate other state legislatures in BCONE’s network to consider similar budget actions.
BCONE members have worked diligently to create a beneficial working mechanism for brownfield project advancement in the State of New York. The current budget proposal would erase all the hard work that has been performed that now benefits the State—demonstrated by the 2015 amendments to the BCP that were careful and arduously-negotiated as a compromise among the Executive Branch, both houses of the Legislature, developers and the environmental community.
BCONE, as well as The New York City Brownfield Partnership and the Environmental and Energy Law Section of the New York State Bar Association (EELS) all grasp the negative impacts of tax payments deferral.
Deferring tax credit payments that regularly flow to urban redevelopment/brownfields stakeholders potentially means putting redevelopment projects in New York at risk of completion. Payments represent the principal incentive and compensation drivers for risks associated with the investigation, remediation and redevelopment of polluted sites that would otherwise remain vacant and underutilized.
View it using this lens: Tax credit funding streams keep projects humming to ribbon cutting and new-site activation. Once up and running, redevelopments located in the urban infill become tax-revenue vehicles in their own right—not to mention job creation engines and socially-impacted change-makers, as local residents and city/state visitors typically gravitate to new residential, commercial and mixed-use redevelopments.
Investor funding and construction financing depend on the amount and the timing of them. A tax credit deferral would only disrupt funding sources or result in the breach of financing-related obligations. The result: Severe delays to ongoing projects and, in some cases, causing them to fail.
As state budgets are crafted, many hard decisions must be made. One easy decision is to keep tax credit payments flowing to stakeholders under the Brownfield Cleanup Program in the State of New York.
The Northeast has long been viewed as a leader in creating dynamic, creative incentive programs to foster brownfield redevelopments along the urban infill. Our organization certainly wants to keep in place this carefully built reputation as a visionary region for redevelopments. The Brownfield Coalition of the Northeast strongly recommends that deferral of BCP tax credit payments, as proposed in the Executive Budget, be eliminated as the State’s 2018-19 budget is finalized.