Subsidy Sheet: Micron reduces spending weeks after announcing NY plans
We all seem to love it, but what exactly is workforce development? New York State has over 500 workforce development programs spread over 22 state agencies, but the state doesn’t have an actual definition of “workforce development” and doesn’t really track or grade its plethora of programs. In a new report, our Senior Research Analyst Elizabeth Marcello explores the many definitions of workforce development and proposes solutions for improving it in NY.
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Just weeks after NY announced plans to give up to $5.5 billion in subsidies to Micron to build America’s largest chip fab just outside Syracuse, the company announced plans to reduce spending by 20% (Times Union).
Maybe – just maybe – NY State taxpayers should not be paying for huge speculative expansions by global corporations in highly cyclical industries. Intel, the largest chip producer in the US, announced layoffs in October, and Albany-area-based GlobalFoundries said this week that it is planning job cuts and a hiring freeze despite a third quarter with record revenues of $2.1 billion. The US chipmakers blame a decline in demand for chips on declining smartphone and computer sales. (Seems like yesterday the global chip shortage was fueling inflation and disruption in US auto and household manufacturing industries.)
We will ask again: Are New York’s “Green” CHIPS tax abatements a wise investment? In the volatile global chip industry, job projections often fall short and corporations break their promises. As we and the state comptroller have documented, the state via Empire State Development doesn’t adequately evaluate whether subsidy recipients are creating jobs, so who is looking out for the taxpayer?
One expert told TU that Micron would “clearly” delay its plans to start building in NY in 2024. Perhaps this will allow the state more time to reconsider the wisdom of the program.
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Mayor Adams announced this week that a $780 million soccer stadium will be built next to Citifield in Queens (NY Times).
City officials emphasized that the NYC Football Club – which is part of the Manchester City corporate group owned by the United Arab Emirates’ royal family – would pay the entire cost of the stadium. If true, that’s great. However, the city’s Economic Development Corporation has not revealed the value of property tax and sales tax abatements that could be worth many hundreds of millions over the course of the deal. Nor has EDC revealed how much of the estimated $200 to $300 million in “infrastructure improvements” paid for by the city are really for the stadium versus the adjacent 2,500 in affordable housing units.
We will have more to say in the weeks ahead. Meanwhile, nationally-recognized stadium subsidy expert Neil deMause shares his take at Hell Gate (and Field of Schemes).
Read the transcript from the mayor’s announcement here.
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Other subsidy stories from this week:
- We and 20 plus other groups urged Governor Hochul to sign a bill reversing Cuomo-era changes to the Public Authorities Control Board, which must approve various aspects of the Penn Station deal (State of Politics). We also urged Empire State Development to be more transparent about the project.
- Every new stadium built in NY since the 1980s has been subject to an environmental review, but Erie County is planning to exempt the Buffalo Bills from the process (Investigative Post).
- More reasons not to give a $1.2 billion subsidy to Vornado for the construction of office towers around Penn Station: Only 47 percent of NYC workers have returned to the office (The City).
- NY Renews, a statewide coalition of environmental groups, iscampaigning to end many of the state’s fossil fuel subsidies (Politico).
- Amazon, which has a value of nearly $900 billion dollars, has received over $5 billion in subsidies from US states and localities according to Good Jobs First. Much of this is thanks to Western NY (Investigative Post).
- Renewing the 421-a tax break for landlords/developers – which costs NY $1.7 billion a year – is one way Governor Hochul might propose dealing with NYC’s housing crisis (The City).
- A coalition of business and labor groups plans to campaign for bonding authority for the New York Racing Association (State of Politics). The horse racing industry has received nearly $3 billion in NY subsidies to date (Times Union).
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If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker and Elizabeth Marcello, and edited by John Kaehny. Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!