Reinvent Albany seeks transparent, sensible business subsidies.
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Tom Speaker, Reinvent Albany
As COVID ravaged the economy, NYS government paid out $465M for film and TV productions in 2020
While state agencies and nonprofits were forced to make painful cuts, last year New York paid out $465 million for film and TV shows, according to the Democrat & Chronicle.
Empire State Development is required by law to publish quarterly reports on the Film and TV Tax Credit, but didn’t post the reports for all of 2020. Twenty minutes after receiving an inquiry from reporter Joseph Spector, the reports miraculously appeared on ESD’s website.
The Film/TV credit is yet another example of how cuts in state aid have not been equally shared: Many state agencies and nonprofits saw 20% of their state aid withheld last year, but the entertainment industry may have actually received a boost in assistance.
Thirteen states have eliminated their film production tax credits since 2009, but New York continues to provide one of the largest tax credits in the nation. California, despite having nearly double NY’s population, caps its credit at $330 million annually.
Samsung Seeking NY State subsidies for new $17 billion plant in Genesee
Will billion-dollar scandals and epic fiascos like the Buffalo Riverbend and Nano Utica projects stop New York State from handing out more hugely expensive subsidies to tech factories? The Wall Street Journal reported last week that Samsung is considering building a $17 billion semiconductor plant in New York’s Genesee County. Sites near Phoenix, Arizona and Austin, Texas are also under consideration.
There is no word on what tax breaks the state would provide, but reports from Arizona suggest a handout competition is underway: According to the Journal, the city manager of Goodyear, Arizona offered “a range of incentives, including tax breaks and infrastructure upgrades” to win over Samsung. In New York, $50 million has already been committed to rehabilitating the site where the plant would be located.
New York has the third-highest semiconductor employment figures in the country, but the state has offered little proof of a good return on investment. Reinvent Albany found that the state’s Nano Utica projects cost up to $585,000 per job as of 2018. Nothing suggests that future endeavors will be any more cost-effective.
Ulster County takes $16M from public schools for parking garage
Ulster County’s Industrial Development Authority (IDA) voted 6-to-1 to approve a $25M PILOT (payment in lieu of taxes) break for a mixed-use project in Kingston. The subsidy scheme will cost the local school district $16 million in forgone revenue. The school board itself had voted against the tax break, only to have the decision overridden in the name of more parking options.
The sole board member who voted against the project stated that the main reason for the high cost is a parking garage that would produce 200 new parking spaces. Because of the PILOT’s passage, over the next 25 years, $16 million will be withheld from the Kingston school district.
Prior to voting yes, one board member acknowledged that the break would impact schools, but said the school funding problem “has to be fixed by Albany.”
Other subsidy news:
- A report commissioned for Western New York Empire State Development calls for $50 million in funding to renovate Buffalo’s Broadway Market. The report envisions the market as a future international tourist destination and points to similar renovations in Seattle ($6 million) and Madison, Wisconsin ($14 million) as justification for the cost. Empire State Development has $4 million available for the project, but officials said the renovations would need buy-in from all levels of government to transform the spot into the tourist magnet that is envisioned.
- The Erie County IDA approved $8.4 million in tax breaks for five companies that will supposedly create 168 new jobs. This amounts to $50,000 per job, three times the estimated national cost of $16,600.
What we’re reading
- In Forbes last week, economist Richard McGahey detailed why neighborhood-targeting programs like Opportunity Zones have failed. McGahey suggests other policies that offer a much higher bang for the public buck, including an expanded Earned Income Tax Credit and Universal Basic Income.
- Tim Bartik, a nationally recognized scholar at the Upjohn Institute in Michigan, explores how job creation efforts can best target distressed neighborhoods through information, training, and transportation.
- At the Center for Budget and Policy Priorities, Laura Meyer and LaDonna Pavetti write about the benefits of subsidized employment.
Public meetings and hearings of note
- The New York State Legislature will hold its 2021 budget hearing on the Workforce on February 2nd at 1pm.
- New York City’s Economic Development Corporation is holding a meeting February 3rd at 8:30am.