Every year, $78 billion is spent by New York state and local public authorities. Some authorities are well-known – such as the MTA – but others, such as industrial development agencies, are far less visible. In a new report, the State Comptroller’s office details what authorities are costing NY, and we highlighted the most important findings:
- There are 1,178 public authorities in New York – 302 state authorities, and 876 local authorities.
- NY public authorities hold $329 billion in public debt – 97% of the state’s total. Under the state’s constitution, voter approval is required for new bonds, but authorities offer a form of “backdoor borrowing” for the state in not needing a vote from the public.
- Authorities lack adequate transparency and accountability. The MTA and ESD, for example, have enormous capital projects that do not flow through the state’s budget, leading to waste, fraud, and abuse, such as in the Buffalo Billion bid-rigging scandal of 2015.
- Authorities give the Governor even more power. By issuing emergency executive orders, the Governor can give authorities the power to circumvent Comptroller review of contracts, creating even more opportunities for waste.
Read the full report here.
Other stories you may have missed:
- BREAKING: NYC’s new soccer stadium will cost the City $516 million over 49 years, according to the NYC Independent Budget Office (NY Times).
- The state’s new $5 million/year video game tax break has its first recipients (WAMC).
- Before approving the Penn Station redevelopment plan, the state did not review a consultant’s report detailing what it would take for the project to achieve the desired outcome (Crain’s). Also in Crain’s, emails showed how a PR firm tried to win over a NY Post columnist skeptical of the deal.
- In 2013, NYS gave about $959 million for Tesla’s solar factory in South Buffalo, championing it as a “game-changer” for clean energy. But the Investigative Post shows that ten years later, the plant isn’t doing that much solar-related production.
- Mayor Eric Adams published a plan to convert NYC office space into 20,000 affordable apartments – using tax breaks for property owners (Gothamist).
- At Boondoggle, Pat Garofalo writes a preview of potential state actions on subsidies in 2023 (among other issues), including a Gianaris bill in New York that would prevent non-disclosure agreements in subsidy deals.
- Governor Hochul is creating a new office to coordinate the state’s handling of Micron’s new plant in upstate Clay (WSYR-TV).
- Senator Sean Ryan, now chair of the State Senate’s economic development committee, talks about his plans to use his position to scrutinize the state’s industrial development agencies (Buffalo News).
Welcome to Liz’s Library, where our Senior Research Analyst Elizabeth Marcello highlights timely research on corporate welfare.
Subsidies don’t work, but who is giving them out? Felix and Hines (2011) set out to understand why cities and counties offer business subsidies. Places that offer business subsidies are heavily populated, have low median incomes, and have a high concentration of manufacturing industries. Interestingly, but perhaps not surprisingly, they find that communities located close to state borders are more likely than others to offer business subsidies. Finally, they discover that “cities and counties in states with troubled political cultures demonstrate the greatest willingness to offer business development incentives.” This is based on the number of government officials convicted of federal corruption crimes. While we might one day convince heavily populated, low-income, manufacturing, and border communities to let facts guide policy, overcoming corrupt political culture is a challenge of its own.
CORRECTION: Last week’s issue said that Ryan McMahon is the Erie County Executive; he is in fact the Onondaga County Executive. We regret the error.
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