Subsidy Sheet: Buffalo News Calls on Hochul to Restore Comptroller Powers

Introducing “Marcello the Shell with Shoes On,” a new feature in which our intrepid Senior Research Analyst Elizabeth Marcello highlights her favorite research on corporate welfare. 

Read the first entry after this week’s stories! 

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Two Subsidy Stories You Might Have Missed This Week 

1. Governor Hochul should sign legislation restoring the Comptroller’s oversight powers over SUNY, CUNY, and OGS contracts, says the Buffalo News in an editorial. 

By definition, the layer of independent oversight will cause some delays, but DiNapoli said his professional staff turned contracts around in an average of 5.3 days last year and completed 90% of them within two weeks. Of those it did review, the office found problems in almost 1,600 contracts valued at $6 billion. Unless they have something to hide, legislators and governors should be able to live with that extra review. New York taxpayers certainly can.

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2. Don’t miss the Investigative Post’s latest great reporting on the State’s  $1.1 billion subsidy for the Pegula family’s Buffalo Bills stadium – turns out Governor Hochul has inflated the number of jobs that the deal will produce, and also that local taxpayers will continue paying millions of dollars a year for the stadium.

There is overwhelming evidence that government hand-outs to businesses are an extremely wasteful way to turn tax dollars into good jobs. Less well known is that business subsidies harm a state’s overall fiscal health. Using data from 32 states for 1990-2015, McDonald, Decker, and Johnson (2020) of North Carolina State University, show that “when a state uses financial incentives, the fiscal health of the state diminishes.” The authors carefully account for different types of government, political party control, economic conditions, and demographics. State fiscal health is defined in terms of dependence on federal aid, a state’s efficiency ratio (a ratio of total expenditures to total revenue), and a state’s debt ratio.

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Fun fact: “The original Penn Station in New York City was a replica of the central hall of the Baths of Caracalla.”

-From Everyday Life in Ancient Rome, by Lionel Casson (highly recommended by Tom!)

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If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker and Elizabeth Marcello the Shell with Shoes On, and edited by John Kaehny. Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!