The Citizens Budget Commission (CBC) reports that New York State and local governments spent nearly $11 billion in 2022 on “economic development,” up from $9.9 billion in 2018. According to CBC, economic development spending will rise to $13 billion annually by 2025 because of increased and expanded subsidies, including the expansion of the film tax break to $700 million a year over 11 years, the extension of the theatrical production tax credit, and the creation of the “Green” CHIPS subsidy program created in 2022 which could be as much as $500 million a year. We thank CBC for publishing this thoroughly documented report, which is by far the best estimate of subsidy spending in New York. It is what watchdogs and policy makers rely on since the state itself does not publish anything like it.
We completely agree with CBC when they say: “New York State and its localities should not spend such massive resources absent evidence they have created or are substantially likely to create jobs that otherwise would not exist.”
The reality is that independent research overwhelmingly shows that corporate subsidies are not a good use of taxpayer dollars. As CBC suggests, New York State and local governments cannot justify spending such massive amounts of public funds on corporate subsidies. That New York is spending such a huge amount shows that government spending and policy priorities are totally warped by the big lobbying, big contributing businesses that are pocketing this wasteful windfall.
There is no such thing as a free lunch and these subsidies take away from investments that are known to work, like funding for child care, education, and physical infrastructure improvements. Reinvent Albany and our watchdog colleagues will continue to advocate for increased transparency of economic development spending and for real, rigorous, independent analyses of economic development programs. Taxpayer dollars should only be spent on programs that work.
Read the full report on CBC’s website.
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New York Corporate Giveaway News:
- A plastics manufacturer, SRI CV Plastics, was caught lying in its application for tax breaks to the Lockport IDA. The company included a fake, AI-produced study with its application touting the safety of PVC pipes, one of the products the company plans to make at its facility.
- Micron, which is slated to get billions in state taxpayer dollars for a Syracuse area chip fab, is applying for $300 million in local tax breaks from the Onondaga County IDA.
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Fun Fact: NY film/TV production tax credits are reimbursements from NY State taxpayers to Hollywood producers for 30% of the cost of any production shot in NY – whether or not that production is ever seen by the public or makes any money.
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If you got this from a friend, sign up here. Subsidy Sheet is written by Elizabeth Marcello and edited by John Kaehny.