1. The Database of Deals bill (S5711-A/A8325-A) is in both the New York Senate and Assembly’s “one-house” budgets (Gotham Gazette). Reinvent Albany and other transparency advocates have been calling for the passage of a robust Database of Deals since 2014.
The Empire State Development Authority created an online “Database of Economic Incentives” last year, but as we and Citizens Budget Commission noted, ESD’s incentives site includes only a fraction of state economic development spending. We urge state leaders to include the bill in the final budget.
“The public wants to know how their dollars are being spent and we think this database of deals legislation will go a long way to ensure that we can capture exactly what is happening, especially in economic development projects,” said State Senator Leroy Comrie, a Queens Democrat who has sponsored the bill.
2. Reinvent Albany called the collapse of pharmaceutical company Athenex “another big reminder that huge NY taxpayer gifts to high-tech manufacturing firms are foolish.” Athenex received at least $225 million in public subsidies through former Governor Cuomo’s Buffalo Billion program, but the Buffalo News reported that the company’s stock has plummeted from $12 to 96 cents.
From our statement:
The Athenex debacle is yet another failure of former Governor Andrew Cuomo’s Buffalo Billion, which has cost New York State taxpayers about $1.5 billion that could have been used to create good jobs cleaning the water and paving the roads of Western New York. Cuomo’s Tesla Buffalo Riverbend solar panel factory cost taxpayers $958.6m and was written down to $75m, a loss of $884m.
3. The Senate and Assembly separately rejected Governor Hochul’s budget proposal to modify the 421-a tax break, which has been derided as a handout to real estate developers. Comptroller Lander also called for the tax break to be eliminated, whereas CBC released a report calling for the tax break to be amended. The City’s Greg David has a great rundown of the arguments for and against the program.
From The City:
“421-a is expensive and inefficient,” [Lander] said Wednesday in his own report on the issue, issued one hour before the CBC released its assessment. “Most of the income-restricted units are unaffordable to the vast majority of New Yorkers, and especially to residents in the neighborhoods where they are built.”
4. Why is there still no announcement on a new Buffalo Bills stadium? An analysis in the Buffalo News goes into the politics of the endless delays.
… Striking a stadium agreement too early could hurt Hochul’s chances of getting the deal through the State Legislature while also wounding the governor politically … “It’s basic politics/government: The longer it’s out there, the more opportunities there are to poke holes and have it fail,” said one longtime Buffalo political insider.
5. More bad news for minority/women-owned business enterprises: Only 4% of NYC contracts last year went to MWBEs (City and State). Economic development officials and experts blamed COVID and red tape.
84% of the city’s MWBEs “do not have access to city spending,” according to the city comptroller’s office. Although New York City’s certified MWBE firms have tripled since 2015 – from 4,000 to 11,000 – only about 2,000 firms have received contracts from the city.
6. Non-disclosure agreements in business subsidy deals are a terrible idea, writes Michael LaFaive of the Mackinac Center for Public Policy in an op-ed (Washington Post). Reinvent Albany supports a bill in the NYS legislature that would ban NDAs in state and local subsidy deals (S1196 (Gianaris) / A9092 (Solages)). We are also part of a national coalition working to stop businesses from silencing government officials via NDAs.
The nationwide number of NDAs signed by public officials is unknown, but it’s clear they’re widespread. In 2020, an Illinois official said it “happens all the time,” most notably “when mega-Fortune 500 companies come.” Considering that states and cities provide up to $95 billion in corporate incentives every year, clearly a gusher of taxpayer dollars is negotiated annually with the risk of taxpayers not finding out the details until after the deals are approved … Which is exactly the point. While companies and politicians say that NDAs protect sensitive negotiations, the NDAs help ensure that companies’ potential big paydays aren’t sunk by unwanted publicity.
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@reinventalbany.org. We look forward to hearing from you!