1. Up to $183 million of New York’s gas tax holiday benefits could go to fossil fuel companies, according to an analysis by the Institute on Taxation and Economic Policy (NY Focus). Fossil fuel companies are receiving 30% of the benefits (30% of $609 million = $182 million). As we pointed out in March, the policy is also hurting vital services like public transit.
Nearly a third of the tax benefits are retained by fossil fuel companies, the analysis found. Another 22 percent are going to out-of-state residents, and 6 percent are going to New York’s richest 5 percent of households. That leaves just 42 percent of the tax benefits going to the remaining 95 percent of New Yorkers — the ostensible target of the subsidy.
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2. Several organizations and local residents filed a lawsuit against the Penn Station redevelopment plan arguing that the project has been unduly influenced by Vornado, a developer and major Hochul donor that stands to receive $1.2 billion in tax breaks from the project (The Real Deal). The lawsuit also challenges the Public Authorities Control Board’s approval of a non-binding agreement between ESD at NYC to divert future city property taxes to the project. The Commercial Observer and The Architect’s Newspaper also covered the story.
From The Real Deal:
“This was not governmental action; it was a joint venture between a state agency and the chosen private company that would benefit — extravagantly — from the plan,” states the lawsuit, filed Wednesday by lawyer Charles Weinstock. “No one stands to gain more from the [plan] than Vornado. In fact, it is possible that Vornado will be the only developer to gain.”
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Liz’s Library
Welcome to Liz’s Library, where our Senior Research Analyst Elizabeth Marcello highlights timely research on corporate welfare.
Politicians love announcing subsidy deals. But do they actually impact job growth? Gabe and Kraybill (2002) investigate this question by evaluating firm-level tax abatements from a sample of more than 350 firms. The authors asked whether business subsidies contributed to job growth and whether recipient firms overstated expected employment gains. The authors find that while they have a big impact on announced employment gains, business subsidies do not substantially increase, and may even decrease, the number of jobs created by a firm. Further, they determine that firms receiving certain subsidies overstate the number of jobs they expect to create to a greater extent than firms that do not receive them. Looks like those subsidy deal announcements don’t do much after all!
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Fun fact: Of the 17 NY Opportunity Zone census tracts that are neither high-poverty nor low-income, nine are located in Brooklyn, and only three are outside of NYC. See them here on the Citizens Budget Commission’s OZ map (Figure 2).
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Another nice shout-out from the Investigative Post’s Jim Heaney, who recommends you read our entire post from last week top-to-bottom.
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