Today at NY Senate Hearing, We Call $10B in Biz Subsidies “Most Wasteful, Corrupt” Thing NY Govt Does

     
At Senate Hearing, Reinvent Albany Calls $10B
in NY Business Subsidies:

“Probably the single most misguided, corrupt, irrational and wasteful thing done by New York with taxpayer funds.”

 

While applauding the Senate for holding the hearing, the watchdog group blasted state and local subsidies to businesses, saying they are “trickle-down economics in which government pays wealthy business people to create jobs, not to provide goods and services to the public.”

Reinvent Albany’s testimony cited five reasons why NY should scrutinize and sharply cut back on subsidies to businesses:

  1. Business subsidy programs are politicized, beset by scandal and a massive, ongoing corruption risk.
  2. They are a waste of public funds, and all independent analyses have found them an extremely inefficient way for government to create jobs.
  3. There is no such thing as free money. The Government Accounting Standards Board says government subsidies to businesses, whether grants or tax abatements, are the same as direct spending using taxpayer funds. A dollar spent on business subsidies is a dollar not spent on COVID vaccines or clean water.
  4. Subsidies to a few lucky businesses are inherently unfair to other taxpayers not getting those subsidies.
  5. NY has spent more on $50M-plus mega-subsidy deals than any other state. ($12B between 2000 and 2017.)

Reinvent Albany says getting control of NY subsidies starts with basic transparency and oversight measures.

Ten Recommendations to NYS State Legislature 

  1. Legislature do no harm. Create no new tax abatement programs and do not give the Governor, ESD or localities a blank check like in Buffalo Billion. Freeze or reduce the total tax abatements and direct subsidies provided by the state. 
  2. This session, pass the “Database of Deals” bill sponsored by Senator Comrie and Assemblymember Wallace (S5711/S8325).
  3. Ensure the Database of Deals bill includes a uniform definition of “job” that applies to all state subsidy programs. Without a uniform definition of “job,” it is impossible to create an apples to apples cost per job that allows different subsidy programs and deals to be compared with each other. 
  4. This session, pass the bill restoring most if not all of the State Comptroller’s “pre-audit” power to review state contracts (S6809 (Reichlin-Melnick) / A7925 (Zebrowski)).
  5. Pass legislation banning public officials or public advisory groups from signing Non Disclosure Agreements related to subsidy and economic development deals (S1196 (Gianaris)).
  6. Pass legislation requiring all information given to public advisory groups of economic development projects be published online.
  7. Require all mega-subsidy deals under consideration to publish a robust financial analysis that provides detailed employment and risk projections.
  8. Freeze all state mega-subsidy deals, including the Penn Station Vornado deal until the extent of the subsidy to Vornado and potential loss of NYC tax revenue is made public.
  9. End state subsidies for chip fabs and high tech manufacturing.
  10. End state subsidies for stadiums, arenas and convention centers. 
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