1. The NYS AFL-CIO, NYSUT, CWA District 1 and Public Employees Federation were among the two dozen groups who wrote Speaker Carl Heastie on Tuesday urging him and the Assembly to take steps to rein in NY State’s $5B a year in secretive corporate subsidies. The NY Senate passed Sen. Gianaris and AM Dinowitz’s bill to end the OZ tax break (S6800), and all eyes are now on the Assembly to finish the job.
The letter also called for the Assembly to pass a package of other related bills passed by the Senate last week, including restoration of Comptroller oversight powers (Reichlin-Melnick/Zebrowski) and an end to non-disclosure agreements in subsidy deals (Gianaris/Solages). The Assembly has passed one of those bills, which increases the transparency of Empire State Development’s Community Advisory Councils (Ramos/Solages).
From the letter:
With only a few remaining session days it’s the Assembly’s turn to lead. The Senate has already passed smart bills that take on the secretive, unaccountable, and often wasteful subsidies that overwhelmingly benefit the wealthiest New Yorkers.
2. The 421-a tax break, a state law that waives $1.77 billion a year in NYC property taxes on real estate developers, is unlikely to be renewed this year (New York Times, Politico NY). Legislators reportedly fear being viewed as subservient to the Real Estate Board of New York during an election year with several hotly contested primaries. (Logically, the legislature should also end Opportunity Zone tax breaks, which are poised to skyrocket, and make 421-a look sensible.)
“421a is a broken, absurdly expensive Band-Aid placed on top of New York City’s broken property-tax system,” said Brad Lander, the New York City comptroller, who has advocated for the end of the tax break. “It’s good that it is not being renewed.”
3. States are giving out massive subsidies to film and TV production, but are also attracting increasing criticism for the practice (Politico). New York, as the article notes, gives out $420 million a year, while Georgia’s subsidy is a stunning $1.2 billion (with zero transparency). Reminder: Film and TV are not considered an effective way to boost the economy.
“It’s cannibalizing the state budget,” Danny Kanso, policy analyst for The Georgia Budget and Policy Institute, a left-leaning group, said … “First, we need transparency. We need to know where these credits are going and how much these productions are getting. And second to that, we need to retool the credit so that we are incentivizing those companies that are actually based in state, that are hiring in-state workers, rather than offering this across the board credit everyone the same.”
4. Huge NYS subsidies for a chip fab in upstate Marcy will cost taxpayers $814,000 per job (Utica Observer-Dispatch). The state granted the plant, named “Wolfspeed,” $500 million for 614 jobs in 2019. Economist Tim Bartik has noted that subsidies costing more than $50,000 per job are a poor use of taxpayer dollars. (Not a typo – NYS subsidy per job is 16 times what economists think can be possibly justified!)
A $1 billion facility. 614 new jobs. 200mm silicon carbide semiconductors … As with many significant business openings nationwide, the path to attracting the North Carolina-based Wolfspeed to the Mohawk Valley is paved with taxpayer dollars.
Other stories you might have missed:
- Friend, ally, and ace organizer Ron Deutsch of New Yorkers for Fiscal Fairness calls on the Assembly to reform business subsidies (Capital Tonight).
- I spoke with Law360 about the need to end NY’s Opportunity Zone tax break.
- At Boondoggle, Pat Garofalo praiss the NY Senate’s passage of subsidy reform bills.
- In an op-ed, NYC Community Board member Layla Law-Grisko calls for more sunlight in the Penn Station revamp (Gotham Gazette).
- The Erie County Legislature approved a memorandum of understanding for the Bills stadium subsidy (Buffalo News).
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