Amazon Deal Never About Subsidies
NY State and Local Governments Still Handing Out $10B Annually In Business Subsidies For Little Benefit
Public Investment Creates Jobs, Not Corporate Handouts
Pass Database of Deals and Clean Contracting in Budget
Amazon didn’t plan to come to Long Island City, Queens because of $3B in State and City subsidies – other cities, including nearby Newark, offered twice that. The Amazon deal did not fail because of a lack of subsidies. It failed because some union leaders couldn’t get Amazon to agree to concessions with national implications for its businesses.
Amazon already has 5,000 employees in New York City for which it receives some of the very subsidies it would have received for HQ2. Despite their obnoxious national search designed to extort the greatest possible concessions from local taxpayers, we think their decision not to add another 25,000 to 40,000 is regrettable. New York City is a great place to do business and is a leading global technology job center.
Amazon’s estimated $3B in State and City subsidies were rightly a lighting rod for criticism: we joined those asking, “Why is the richest corporation (and person) in the world getting our tax dollars and more favorable tax treatment than established small businesses?”
The exclusive focus on Amazon, misses a larger point. State and local governments give out $10 billion annually in business subsidies, many deals of which cost far more per job than Amazon was projected to.
NY State’s lawmakers and advocates should not lose sight of the real issue. Our economic development programs need to be reviewed to determine whether or not they work.
That begins with passing a Database of Deals and Clean Contracting in this year’s budget:
A Database of Deals
New York’s elected leaders, including the Governor, and all of the mayors and county executives, need to learn the right lesson from the Amazon drama. We all need to see clear evidence of which investments work and which do not. As part of the budget, the Governor and legislature need to pass a Database of Deals which provides a transparent, public accounting of the $4.4 billion annually in State business subsidies.
Clean Contracts for State Economic Development Deals
New York’s economic deals have been tarnished by a sordid history of bid rigging and influence peddling. The Governor and legislature should pass into permanent law a proposal restoring the state comptroller’s pre-contract review powers.