Three Subsidy Stories You Might Have Missed This Week

1. Legoland New York is open! Let’s not forget that the project received at least $37 million in tax breaks – and some of that $37 million would have gone to local schools. The Lego Group is worth nearly $40 billion.

Legoland also got a tax abatement from the Orange County Industrial Development Agency in 2017 that will reduce by an estimated $37 million the property taxes it must pay over 20 years to the Goshen School District, the Town of Goshen, Orange County and other taxing entities.

2. Elon Musk took the witness stand in Delaware to defend his company’s acquisition of solar panel manufacturer SolarCity. Tesla-SolarCity’s plant in South Buffalo has received $950 million in subsidies from New York taxpayers.

To the surprise of no one in the Delaware courtroom, the famously colorful billionaire defended himself in the most personally combative terms. “I think you are a bad human being,’’ Musk told Randall Baron, a lawyer for the plaintiffs who was pressing Musk to acknowledge his mistakes in helping engineer the SolarCity acquisition.

3. At Boondoggle, Pat Garofalo writes about Wisconsin’s recent legal victory over Lowe’s, which used “dark store theory” to try to lower a location’s property taxes. Under “dark store theory,” retailers argue that their locations should be valued lower because they are difficult to sell. Though a sordid tactic, we can’t deny that the term “dark store theory” itself is pretty cool.

These cases, even if the towns trying to enforce their property tax laws win most of the time, can be very expensive. Fighting them is a cost small towns often can’t afford — and that’s likely what the big box stores are counting on. They figure more places will settle at a lower property tax rate, rather than pay lawyers to fight a massive corporation with nearly limitless resources in court. Stopping the spread of dark store theory via a legal strategy is simply, to me, unsustainable.

If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker, Policy Analyst at Reinvent Albany. Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!