Subsidy Sheet: Niagara County gives Amazon stunning $123 million tax break

The Niagara County Industrial Development Agency approved $123 million in tax breaks for Amazon this week without making a fact-based case for why it was necessary, or attempting to address informed criticism from an array of NY and national watchdog groups (Niagara Gazette). It is one of the largest Amazon subsidies in US history.

In testimony, Reinvent Albany, Good Jobs First, unions, and the American Economic Liberties Project demolished NCIDA’s inconsistent and shoddy rationale for the enormous subsidy. Reinvent Albany collected some of the greatest hits:

• The opening of e-commerce warehouses actually results in a net loss of jobs.
• E-commerce also contributes to a decline in retail occupancy rates, property values, and property tax revenue.
• Job takers are more likely to come from outside Niagara County, such as from more populous Erie County.
• Tax breaks are not a factor in where Amazon decides to build warehouses. Amazon chooses locations based on Prime subscribers and access to highway and air cargo infrastructure.
• New York State’s own Authorities Budget Office wrote in 2017 that ”the amount of financial assistance provided to a project appears to have no direct impact on private sector job growth.” 

Using actual data, logic, and independent research, Greg LeRoy at Good Jobs First completely demolished NCIDA’s claim that the project will produce $1.1 billion in benefits. 

The Niagara Amazon tax breaks were reported on by multiple local and national news outlets, and we hope local governments will think harder before giving huge subsidies to warehouses for Amazon or any other e-commerce company.

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Governor Hochul signed the $10 billion “Green” CHIPS subsidy bill rammed through at the end of the legislative session (Gothamist). 

As we said in our statement, this giant tax break to a highly profitable industry will likely do nothing to bring jobs to New York. Nationally prominent labor economist Tim Bartik has done extensive research showing that government subsidies affect where companies decide to locate only 2 to 25% of the time.  We continue to believe the “Green” CHIPS subsidy would not stand up to scrutiny by independent experts, and are appalled by how the bill was drafted, introduced, and passed with almost zero public discussion or debate. 

Watch our John Kaehny talk with Spectrum News about why this deal is so bad.

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Other subsidy stories from this week:

• Our Elizabeth Marcello asks in a Times Union op-ed, “Just what is New York getting from billions for economic development?”
• I spoke with Central Current about how NYS’s lack of pay-to-play restrictions reflect poorly on Governor Hochul.
• Local businesses are unhappy with the Governor’s Penn Station Development plan (Curbed). 
• Maia Pandey also writes that the Penn Station project is repeating past mistakes, like Hudson Yards (City and State).
• At Boondoggle, Pat Garofalo has a good write-up on NCIDA’s “public hearing” for the project being a perfect example of how governments avoid the public.
• Amazon got $7 million in tax breaks for a Hamburg warehouse that remains empty (Buffalo News).
• One of the last projects to receive the 421-a tax break – a huge handout to real estate – is moving ahead (Crain’s).
• NYPA confirms that Amazon did not apply to NYPA for incentives, in response to a FOIL request from Niagara Gazette’s Mark Scheer.
• Great interview with Tim Bartik about how governments can best develop distressed regions and neighborhoods (Pew Trusts).

Finally, please subscribe to Central Current, the new nonprofit news outlet writing about local issues in Syracuse. We look forward to their future work!

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If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker, Policy Analyst at Reinvent Albany, and edited by John Kaehny.

Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!