Erie County's $90 Million Problem Starts With the Tax Breaks Nobody Talks About

Erie County faces a $90 million budget deficit. The county executive is looking at service cuts. Legislators are debating what to trim. But buried in the county’s own financial records is a number that should change the entire conversation: $266.8 million in school property tax exemptions granted by the county’s six Industrial Development Agencies — money that was supposed to be on the tax rolls, funding classrooms.

That’s $710 per household, every year, shifted from corporations onto homeowners and school districts.

I found this by going through the budget. Not to make a political point — to understand where the money went. What I found was a system that runs on autopilot, approves virtually every project that applies, and has never clawed back a dollar when companies fail to deliver on their promises.

The school districts paying the price

Erie County has 26 school districts affected by IDA tax exemptions. The impact is not evenly distributed.

Williamsville Central — one of the county’s largest districts, serving 9,494 students — has lost $14.8 million in school property tax revenue to 268 IDA projects. That’s $1,562 per pupil that the district has to make up through higher taxes on homeowners or cuts to programs. A single pipeline project, Empire State Pipeline, accounts for nearly $6 million of that exemption — while donating just $1,000 to political campaigns.

Lancaster Central lost $5.3 million across 269 projects. Frontier Central lost $4.2 million. Sweet Home lost $3 million. West Seneca lost $2.2 million.

These aren’t abstract numbers. They’re the reason school boards hold emergency budget sessions. They’re the gap between a district that can afford a reading specialist and one that can’t.

A system that never says no

In 2017, the New York State Comptroller audited the Erie County IDA. What they found should have been a scandal: the agency had approved 100 percent of the 30 projects reviewed during the audit period — every single one. The board had no formal evaluation criteria. Members relied on what the auditors called “collective personal knowledge” to justify millions in tax breaks.

Of the 32 project owners reviewed, 14 failed to meet their job creation goals — a shortfall of 367 jobs. The ECIDA never recaptured a single dollar of financial assistance. It never terminated a single project.

This isn’t economic development. It’s a rubber stamp.

Who benefits

The pattern becomes clearer when you look at who’s giving and who’s getting.

Forty percent of Erie County IDA beneficiaries also donated to political campaigns. The county’s pay-to-play score — a metric combining donor rates, exemption concentration, and governance overlap — ranks it 26th out of New York’s 104 IDAs.

Harris Beach PLLC, the law firm that serves as ECIDA general counsel, earned an estimated $3.7 to $4.9 million from the agency between 2017 and 2022. During the same period, the firm directed $79,850 in campaign contributions to the officials who appoint the board it advises. The firm’s fees are paid by the applicant companies, not the agency — meaning the more projects approved, the more Harris Beach earns. The agency’s own procurement reports show only $472,525 in payments, confirming that 87 percent of the firm’s fees are invisible to public reporting.

Mark Poloncarz, who during his 2011 county executive campaign called the Harris Beach arrangement “pay to play at its base level,” retained the firm after winning office. It has served continuously under both Republican and Democratic administrations. The donations simply redirected to the new power holders.

The bipartisan machine

This isn’t a Republican problem or a Democratic problem. It’s a structural one.

When Erie County transitioned from Republican Chris Collins to Democrat Mark Poloncarz, Harris Beach kept the ECIDA counsel contract and redirected its campaign contributions. Benderson Development, the county’s largest private developer, donates to candidates of both parties. Carl Paladino, whose Ellicott Development holds $9.5 million in property tax exemptions through a network of 147 shell entities at 295 Main Street, directed 40 percent of his $1.3 million in political donations to Democrats between 2000 and 2010.

The same developers fund both sides. The same law firms advise both administrations. The same families — the Feroletos, the Vaccos, the Lorigos — hold positions spanning the IDA boards, the judiciary, and elected office simultaneously. Joel Feroleto now sits on the ECIDA board while his mother Justice Paula Feroleto presides over the court where the same developers’ disputes are heard.

Neither party has an incentive to reform a system that benefits whoever holds power.

What this means for the budget deficit

Erie County’s $90 million deficit didn’t appear overnight. For years, the county has been giving away its tax base — $340.9 million in total property tax exemptions, $193.8 million net after partial PILOT payments come back — while the costs of running schools, maintaining roads, and providing services kept rising.

State legislation that would prohibit IDAs from abating school tax revenue — Senate Bill S89 — has failed to clear committee for three consecutive years. A bill prohibiting elected officials from serving on IDA boards has gone nowhere.

The deficit conversation in Erie County needs to start with a basic question: before we cut services, should we keep giving tax breaks to companies that don’t create the jobs they promise, overseen by a board with no evaluation criteria, advised by a law firm that profits from every approval?

The data says no. Whether the legislature agrees is up to the people who elect them.

All findings are derived from public records: New York State Authority Budget Office IDA project reports (34,348 projects), NYS Board of Elections campaign contributions (12.49 million records), NYS Comptroller audit S9-15-70, NYS Department of State corporate filings, and PARIS procurement data. Full methodology.

Zach Beaudoin is a data researcher and candidate for Erie County Legislature, District 11.