Subsidy Sheet: Hochul admin purchased $637m of COVID tests that cost 2x other NYS vendors
Just how bad was the Hochul administration’s $637 million payment for COVID test kits from a major donor’s company? Pretty bad, the Times Union shows, in a new story detailing how the tests from the company, Digital Gadgets, end up costing NY taxpayers hundreds of millions. The Hochul administration paid far more for each of Digital Gadget’s tests but also bought far, far more from the company than cheaper competitors. Why?
Digital Gadgets’ tests cost $12.25 each compared to $5 each for the first 5 million tests the state bought from iHealth ($5 each). The second most expensive vendor was Spectrum Medical, whose tests cost $7.80 each. The state ultimately paid out 5 times more to Digital Gadgets than it did to any competitors, as this damning graph shows:
Image from Times Union article.
Governor Hochul claims that she and her staff didn’t know that Tebele had donated $69,700 to her campaign prior to the purchase order for the tests (though her staff have likely known of other large donations in the past), and a Department of Health spokesman claims that the rushed purchase was necessary to deal with the Omicron wave in December. But as the Empire Center’s Bill Hammond points out here and in the piece, the Hochul administration continued purchasing the tests months after the wave had subsided.
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Other subsidy stories from this week:
- NY Tech companies’ are struggling to meet their job targets and may lose Excelsior tax breaks as a result (The Real Deal). But, as the article notes, a 2016 Comptroller audit found that ESD often can’t verify whether companies created the jobs.
- The NYC Economic Development Corporation is looking for a new operator for the City’s notoriously inefficient, costly, and ethically compromised ferry system (The City).
- The Investigative Post talks to experts and locals about how they view Niagara County IDA’s recent vote to give Amazon a $124 million tax break for a warehouse. Our opinion, of course, is that it’s a colossal waste of taxpayer funds.
- This is late, but Good Jobs First has a great write-up of how their Subsidy Tracker has been used to show in studies that states with more subsidies have higher inequality. Unsurprisingly, New York has the highest income inequality of the 50 states.
- The Times Union explains the legal argument that Kaloyeros and other Buffalo Billion accomplices are using to get their convictions overturned by the Supreme Court.
- Chris Bragg talks about the Digital Gadgets story on Capitol Pressroom.
- REMINDER: The American Economic Liberties Project will hold a workshop titled “Tools for Taking on the Corporate Subsidy Machine” on Wednesday, September 14th at 12pm. Register at the link.
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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!