1. Governor Hochul has won the election and has four more years to make good decisions about how our tax dollars are spent. New York Focus wants to know: “What are New Yorkers actually getting for all those corporate subsidies?” Especially since, as NY Focus points out in a link to our report, the research shows business subsidies don’t work.
The research is clear that across the country, “economic development” deals often fail to actually develop the local economy. And in New York, they’re often the least transparent, least democratically conducted expenditures of taxpayer money. Going forward, how will you ensure that New Yorkers aren’t getting ripped off?
2. The real estate industry is hopeful that Hochul’s reelection could lead to the revival of 421-a, a tax break for developers and landlords that costs NYC $1.7 billion a year (Crain’s).
In other 421-a news, a recent court decision could produce a wave of lawsuitsagainst landlords taking the tax break (The Real Deal).
3. In an op-ed, Community Board 5 member Layla Law-Gisiko proposes a new plan for Penn Station and describes issues with the current proposal, which would provide $1.2 billion in tax breaks for real estate developer Vornado (NY Daily News).
Welcome to Liz’s Library, where our Senior Research Analyst Elizabeth Marcello highlights timely research on corporate welfare.
The University of Illinois-Chicago’s Drucker, Kim, and Weber (2019) wondered whether business subsidies helped municipalities in three Midwestern states (Illinois, Wisconsin, and Michigan) recover from the Great Recession. While the states shared similar histories before the recession, they adopted different strategies for promoting business growth. Using a unique dataset that combines data on tax increment financing districts and tax abatements together with socioeconomic, geographic, fiscal, and spatial characteristics, the authors measure employment growth, establishment formation, and business relocation for six municipalities. The authors “find little evidence that economic development subsidies helped municipalities recover from the crisis”(895).
Fun fact: As of 2004 the Empire State Development had a subsidiary called the Overcoat Development Corporation, which was created to help move an outerwear company from Indiana to NY. (We are still trying to determine if the “ODC” was ever dissolved. If you know the answer, we’ll mail you a Reinvent Albany pen.)
-The New York Times, March 20, 2004
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