Over 30 faith, good government and advocacy organizations from across New York sent a letter to Assembly Speaker Heastie and Senate Majority Leader Stewart-Cousins asking them to freeze all current corporate handouts and reject any new and expanded subsidies in their respective one-house budgets. Governor Hochul’s budget includes billions in new and expanded tax abatements, financing and other forms of subsidies to large corporations and wealthy investors, above the $10 billion currently spent by state and local governments.
Independent experts from the right, left, and center overwhelmingly agree that state and local government handouts to corporations are ineffective and wasteful. New York’s authoritative 2013 report to the Governor’s Tax Reform and Fairness Commission found: Business incentives violate principles of good tax policy, tenets of good budgeting… and research since the mid-1950s show they do not impact net economic gains.
Sadly, the Governor’s budget doubles down on trickle-down economics and discredited corporate giveaways. The groups are hopeful that the Senate and Assembly can do much better and ask that they redefine state economic development and root state investments in facts and fairness.
The letter states that the evidence is clear: Good jobs don’t come from corporate handouts – they come from broadly beneficial public investments in physical and human infrastructure like education, workforce development, child and home care, housing, transportation and clean air and water. It’s time to freeze the deals and implement reforms that move towards investing public funds in public goods.
“We need the Senate and Assembly to press the pause button and freeze any new tax credits that the Governor has proposed in her Executive Budget. We already spend over $10 billion in state and local funds on corporate giveaways and it’s not time to double down on those discredited programs – it’s time to fold and walk away from the table,” said Ron Deutsch, Director of New Yorkers for Fiscal Fairness.
“Senate Leader Stewart-Cousins and Speaker Heastie, freeze these discredited and wasteful corporate giveaways. We appeal to your sense of fairness and common sense. Your conferences are clearly concerned about social inequality, so how can you allow New York State to double down on trickle-down economics and literally give away billions in new taxpayer giveaways to the richest investors and corporations?” said Elizabeth Marcello, Ph.D., Senior Research Analyst at Reinvent Albany.
“The greatest investment any government can make is in its people,” said Rashida Tyler, Deputy Director of the New York State Council of Churches. “New York is in the midst of a housing crisis with over 74,000 families and individuals experiencing homelessness, nearly half of renters are rent-burdened paying over 30% of their incomes for ever increasing rents, while wages continue to lag behind inflation. We ask our legislators to freeze the corporate giveaways in the budget. Investing the money that would have been expended on corporations into New York’s families and communities would not only be the right thing to do, but also be the best return on investment.”
“Governor Hochul’s massive new handouts to wealthy corporations are just plain trickle-down economics. The simplest and strongest thing for the Legislature to do is to freeze all corporate subsidies,” said Michael Kink, Executive Director of the Strong Economy For All Coalition. “Freeze the corporate giveaways and invest public money in public goods like early childhood and higher education, affordable housing and renewable energy instead.”
“New York’s leaders need to drop the pretense of ‘economic development’ in the form of wasteful and unnecessary giveaways to corporations, and recognize that that money would be far better invested, dollar for dollar, in public goods – through programs like universal child care – instead of diverting those resources away from our communities. Research shows that investment in high quality early childhood is a highly effective form of economic development, with up to $16 in benefit each year for every dollar spent. Those dollars could be used to invest in fair compensation for child care educators, many of them women of color, and creating more quality care programs to put our children on the path to educational success. Real economic development means investing in New York’s people and communities, not giant corporations,” said Jasmine Gripper, Executive Director, Alliance for Quality Education.
“Budgets involve choices, and Governor Hochul in her Executive Budget has chosen to favor the needs of politically connected companies and wealthy New Yorkers over those of low and moderate income families,” said Bob Cohen, Research and Policy Director of Citizen Action of New York. “Time and time again, many legislators and the Governor’s office tell us they can’t provide for urgent needs like quality child care, health coverage for immigrants, and funding to transition away from fossil fuels because New York lacks the money. Instead, we need to make our tax code fairer and reorder our priorities by rejecting subsidies to big corporations that promise to create jobs for the tax breaks we give them and time and time again don’t deliver.”
“New York is one of the nation’s most prolific purveyors of corporate subsidies, but instead of economic prosperity, New Yorkers have received a slew of corruption scandals, empty buildings, and emptier promises,” said Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “There is no legitimate reason for the legislature to grant Gov. Hochul any of the corporate subsidy expansions she asked for. Instead, it’s time to take a stand, freeze senseless corporate handouts, and stop the Hochul administration’s effort to further enrich already dominant corporations.”
“Freeze all corporate giveaways. NY has spent $3B subsidizing horse racing since 2004 and has never once verified the job or economic impact claims. Why does NY State massively support horse racing when our state’s Constitution mandates racing support the state? Subsidies just don’t work for this and many other industries,” said John Scheib of Scheib Associates.
See the full letter below.