Recently, the majority in the Erie County Legislature passed an item which will harm not-for-profit organizations and economic growth in Erie County. This is how they did it.

Federal tax code allows lenders the ability to collect tax-exempt income by lending to not-for-profit organizations. In return, banks offer lower rates to the not-for-profits, saving 15% on construction projects. However, there must be a legal vehicle for not-for-profits to take advantage of these lower rate loans. Until recently, New York State created this vehicle through state law. Unfortunately, the state allowed this law to expire. County Executive Collins and the Erie County IDA were able to find another way for not-for-profits to again take advantage of these lower interest rates by allowing them to secure loans through the Erie County Industrial Land Development Corporation (ECILDC). The ECILDC would merely be a pass through agency. It would not cost Erie County taxpayers any money and the county would face no cost or responsibility as a result of these loans.

Shamefully, the majority in the Erie County Legislature saw this as an opportunity to benefit special interests. The majority decided to only allow not-for-profits to take advantage of these loans if they agreed that the projects would be considered public works under New York State law, subjecting the not-for profit projects to numerous labor restrictions, including prevailing wage requirements. These additional burdens could raise costs on projects as much as 30%, eliminating any savings from the lower interest loans. Although some not-for-profits already are bound by these restrictions, many others are not.

The majority who voted for this special interest give-a-way has received over $100,000 in campaign contributions from the same special interests. The majority has paid back these contributions by turning its back on Erie County taxpayers. Instead of importing private sector practices into government they are exporting failed government policies to the private sector. As a result of this legislation, economic growth will be delayed and not-for-profits will be forced to ask already overburdened tax payers for more money during difficult economic times. Erie County taxpayers deserve better, and I will continue to stand up to special interests and demand real reform that benefits taxpayers and not the entrenched political class.

As always, I would like to hear your thoughts on economic development in Erie County Legislature. Please contact me at my District Office, located at 8180 Main Street. I can also be contacted at 631-7650 or by e-mail at raymond.walter@erie.gov.

Back to District 4 Homepage