New York State and local governments are not broke. Far from it. They spend an estimated $6.6 billion/year subsidizing businesses in the hope they will create more jobs and economic activity. Despite this, in recent years, New York has suffered higher job losses than the rest of the country, after lagging in job creation for decades. The Citizen Budget Commission’s excellent new report, Avoiding Past Mistakes, details how business tax breaks, subsidized financing and direct grants have created a complicated tangle of bureaucracies and programs, but not many jobs.
CBC’s report includes sensible recommendations for the Cuomo administration’s economic development policy and ten newly created Regional Councils. But really, New York needs a completely new economic development strategy. It needs to stop subsidizing individual businesses, and start investing in public transportation and power infrastructure that benefit everyone and creates jobs directly. We are listing CBC’s recommendations below, because they broadly apply to many state and local government programs in New York.
Summary of CBC Recommendations
1. Tame the Hydra: Consolidate hundreds of economic development councils, Development Authorities and programs into the Regional Commissions.
2. Standardize Performance Metrics for All Programs and Pay Only for Results.
3. Improve Transparency with More Comprehensive Disclosure Requirements
and a Unified Economic Development Budget. (Yes, see also Show Us the Subsidies: An Evaluation of State Government Online Disclosure by Good Jobs First.)
4. No Additional Funding. (This at a minimum. We would prefer an end to almost all tax expenditures and IDAs.)