New York State finally put the Database of Deals into law, and the legislation is … a mixed bag.
The good news is that the Database was finally established in law. New York State spends $5 billion in business subsidies every year, and thanks to the bill’s passage, the state is now required by law to account for whether or not those subsidies are creating jobs. We are grateful to all the legislators (Senator Comrie, Assemblymember Wallace, and Senator Krueger) and advocates (particularly Ron Deutsch at New Yorkers for Fiscal Fairness) who worked so hard to get the Database this far.
The bad news is that the new law was weakened by last-minute loopholes that will allow Empire State Development to shirk job reporting requirements. For example, the database will not be required to report on the number of part-time and contract jobs created through subsidies. There also will not be any new data for subsidies created prior to October 2022.
Still, it is a start, with improvements hopefully to be hashed out through negotiations and future legislation. Read our statement for more information.
New York is giving $1.13 billion to Florida billionaires to build a football stadium – that’s $600 million from the state and $250 from Erie County upfront, then $280 million in repairs and capital maintenance over the next several decades (Investigative Post).
Despite widespread opposition to the deal from legislators, subsidy experts, editorial boards, and the public, the deal went through completely intact. The Pegula family, who own the Bills, have a net worth of at least $5.8 billion and will be receiving $3.5 billion over the next 11 years through an NFL media deal, so no one can argue that they needed the money.
In The Nation, Ross Barkan eloquently summed up why this deal is so bad:
The opportunity costs are large. Erie County could spend $250 million to remediate lead in impoverished neighborhoods in Buffalo or upgrade crumbling infrastructure. Buffalo public schools continue to struggle. The city is recovering from the depths of deindustrialization in the last century, but its comeback has been uneven. Like other Rust Belt cities, Buffalo is brutally unequal and segregated, with wealth flowing nowhere near its Black working-class. Rather than address these problems head-on, Hochul will ensure that public funds will go instead to a football team that plays nine games a year in the city’s suburb, Orchard Park. The reality for working-class Buffalo won’t change at all.
The budget wasn’t all bad for things we keep an eye on:
- The Authorities Budget Office, which oversees nearly 600 state and local authorities holding $243 billion in public debt, will get more funding – $2.86 million, up from $2.05 million for the past decade. This is short of the $5 million Reinvent Albany and other watchdogs requested, but it is a significant improvement.
- The 421-a tax break regarded as a handout to real estate developers was not renewed in the budget. The program, which expires in June, could still be renewed (or reimagined) before the end of the year. Check out the Community Service Society’s recent report on the program’s failures.
But there was also plenty to lament:
- New York did not close the Opportunity Zone tax break loophole. The state ended part of its tax break last year, but a loophole in the legislation could cost the state billions starting in 2029.
- The Film/TV tax credit grew by another $1.3 billion and was extended from 2026 to 2029 – that’s a bonanza for Hollywood production companies and their deep pocketed investors. (See Pat Garofalo’s write-up on film tax credits’ spread around the country here).
- A new NY State $5 million Digital Gaming Tax Credit. The only silver lining is that this is $45 million less than what the bill’s sponsors asked for.
Could be good, could be bad:
- The Department of Taxation and Finance will be required to hire a “lowest responsible bidder” to do an “independent analysis” of NYS tax incentives. We hope that the contractor will be truly independent, but because it is chosen by the Department, the analysis could be a whitewash. We encourage readers to check out the Comptroller’s October 21 audit of ESD programs, which found that ESD, “with few exceptions … does not monitor or evaluate its economic assistance programs to determine whether goals are met.”
Other NY subsidy stories:
- “Blight is your friend,” says the developer pushing for massive state support for his Penn Station area development on his strategy for getting government subsidies (Politico New York).
- Good Jobs First released a new report on state economic development transparency, and New York’s Excelsior Jobs program – among others – rated only 23 out of 100. Surprisingly, NYS did rank 12th out of 50 states for transparency, though the bar is quite low, with the top-performing state – Nevada – scoring only 63.6 out of 100.
- Amazon has not yet applied for tax breaks from the Niagara County Industrial Development Agency (Investigative Post).
- Oh yeah, Lieutenant Governor Brian Benjamin resigned after being arrested on bribery charges (Gothamist).
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!