Reducing out of control corporate subsidies requires herculean effort. In New York, reformers are trying to pry $10 billion a year in “free money” out of the clenched hands of politically connected businesses. Despite study after study showing job creation subsidies are a waste of taxpayer dollars, the political math overwhelmingly favors businesses hiring expensive lobbyists or making virtually unlimited campaign contributions to get subsidies.
Ending subsidies is incredibly difficult – so what does it take to get governments to provide basic subsidy transparency?
Every single year, New York State government spends $4.4 billion in business subsidies, incentives, and tax breaks (our local governments spend an additional $5.5 billion). But after decades of spending – and six years since the Buffalo Billion bid-rigging scandal of 2015, taxpayers still cannot see how much they are paying to individual businesses to create jobs or whether jobs are even being created.
A Database of Deals is a fundamental transparency reform that would list all of the taxpayer subsidies received by a corporation, including the type of subsidy, jobs created or retained, and the cost per job to taxpayers. NYC, Florida, Maryland, and Indiana all have one. But efforts to make it a reality in New York State have been much tougher than expected. Here’s a history of the proposal in New York (click to enlarge):
Why isn’t the database live? ESD has offered a litany of excuses, including COVID-19 and the amount of labor involved. Regardless of the validity of these claims, it’s clear that the state has not made the database a priority – when it’s launched, the database might be missing a number of subsidies and deals, and there’s no legislation requiring the database to have, well, anything. Meanwhile, the state continues to spend billions and billions on programs that all evidence shows waste public funds.
Other subsidy news
- Costs at Genesee County’s Science and Technology Advanced Manufacturing Park are spiraling, according to the Investigative Post.
- Samsung is unlikely to come to NY, but if it does, state and local subsidies could exceed $900 million (WGRZ).
- Tesla has received an extension from ESD to meet employment targets (Buffalo News).
- Legoland NY may be opening soon – and has received $25 million in grants from Empire State Development (Times Herald-Record).
- Good Jobs First’s excellent national Subsidy Tracker has added 17,000 new records.
- A clause added to the American Rescue Plan Act appears to impose a truce on state subsidy wars (Real Clear Politics).
- New York Power Authority built a Museum of Energy in Utica, open to the public on May 10th (Rome Sentinel). Does it include an exhibit on energy subsidies?
What we’re reading
- New York has spent billions over the past 15 years subsidizing horse racing (Defector).
- At Boondoggle, Pat Garofalo writes about why Apple coming to North Carolina is a bad deal for the state. Last week, he detailed the good, the bad, and the ugly of the renegotiated Foxconn deal in Wisconsin.
- California never participated in the federal Opportunity Zones program, but the state received the bulk of OZ investments (Bisnow).
- New York State provides more than $400 million in Film/TV subsidies annually, with the vast majority going to NYC (Syracuse.com).
- Good Jobs First’s Katie Furtado and Kasia Tarczynska write about how much this year’s Best Picture nominees received in subsidies.
- Our most handsome Subsidy Sheet writer answers 5 questions about Opportunity Zones for Good Jobs First.
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September 2015 – Multiple news outlets report that the federal government is reporting corruption in Governor Cuomo’s Buffalo Billion program.
November 11, 2015 – A letter from government watchdogs urges state leaders to pass ethics and transparency reforms, including a database of deals. The letter is signed by Reinvent Albany, Citizens Union, Common Cause NY, the League of Women Voters of NYS, and NYPIRG. The database is raised as a way to “end government spending that takes place in the shadows.”
August 3rd, 2016 – In a press release, Fiscal Policy Institute and Citizens Budget Commission join Reinvent Albany’s call for a database.
December 5th, 2016 – Six watchdog groups call for a special session to enact clean contracting reforms. The call includes a database of deals empowering the comptroller to review all state contracts over $250,000. A special session was never called.
March 2017 – Both the Assembly and Senate include a database of deals in their one-house budgets. The two proposals differ on certain details (the Assembly’s is more comprehensive). Ultimately, the database is not established in law.
June 1, 2017 – Democratic Assemblymember Robin Schimminger introduces a Database of Deals bill. Six days later, Republican Senator Thomas Croci introduces a Senate version, which is not aligned with the Assembly’s.
May 9, 2018 – The Senate unanimously passes its Database of Deals of bill.
June 7, 2018 – Over twenty groups issue a memo of support for the Database of Deals. The memo is led by Reinvent Albany, and signatories include 32BJSEIU, Professional Staff Congress of CUNY, Strong Economy for All, and VOCAL-NY.
June 19, 2018 – The Assembly’s Database of Deals bill reaches 47 cosponsors.
June 13-20, 2018 – Multiple editorial boards urge the Assembly to pass the database of deals. These include the conservative New York Post and more progressive Times Union.
June 20, 2018 – The Assembly adjourns without passing the Database of Deals.
August 30, 2018 – Governor Cuomo pledges to establish a Database of Deals in an interview with the NY Daily News Editorial Board.
March 2019 – The Senate and Assembly again include the Database of Deals in their one-house budgets.
April 2019 – The passed budget authorizes Empire State Development (ESD) to spend $500,000 establishing a Database of Deals. The database is not established in law.
February 13, 2020 – In testimony at the joint legislative hearing on economic development, ESD President Eric Gertler says the database will be live by the end of the year.
December 2020 – The database is not launched.
February 23, 2021 – In testimony at the joint legislative hearing on economic development, Gertler says the database will be live in “a matter of weeks” following questions from Senator John Liu.
April 29, 2021 – The database has not been launched.