We think state and federal Opportunity Zone (OZ) tax subsidies are one of the most blatantly grotesque and wasteful government giveaways to the super-rich. The press and watchdog groups have documented dozens of examples of OZ tax breaks being squandered on things like super-luxury housing and dog spas, and there is no substantive data showing OZs are a cost-effective investment of public funds.
But so what if Trump-era OZs are an obviously wasteful and backwards tax policy? The US House still reintroduced legislation that would extend them by two years (Bloomberg Tax).
In the Bloomberg article, Reinvent Albany and Good Jobs First pose the obvious question: Why extend a costly federal program without any evidence that it works? Shouldn’t the federal government collect robust data, analyze it, and then decide whether or not to extend the program? We’re optimists by nature, but might this be an attempt by wealthy OZ investors to get even more free government money before the data shows that OZs are a massive failure like previous similar giveaways?
The bill’s transparency provisions are an improvement and should have been included in the original OZ legislation – they require Opportunity Funds to file annual disclosure reports to regulators, some of which would be made public. But a transparent boondoggle is still a boondoggle. This terrible giveaway to wealthy investors should not be extended by Congress and should be ended in New York.
The bill has yet to be reintroduced in the US Senate. Let’s hope it stays that way – and let’s also hope NY finally passes S543 (Gianaris) / A2170 (Dinowitz) and fully decouples from the OZ program next year.
Other NY corporate giveaway news:
- CBC and Reinvent Albany sent a letter asking the Governor to veto a bill that would further expand the state’s film tax credit (Crain’s).
- Monroe County’s IDA provided $63 million in tax breaks for fairlife, a Coca-Cola subsidiary (Rochester Business Journal).
- The Times Union Editorial Board supports the Public Service Commission’s rejection of $12 billion in additional offshore wind subsidies.
- Another day, another paper showing stadium subsidies are a bad investment. (H/t to Subsidy Sheet alum Elizabeth Marcello.)
- The STAMP pipeline in upstate Genesee County is causing serious issues, writes the Buffalo News Editorial Board. STAMP hosts the Plug Power facility that will receive subsidies worth $4 million per job.
- NY will not be one of the first federally-designated Clean Hydrogen Hubs, meaning Plug Power may miss out on federal subsidies.
If you got this from a friend, sign up here. This week’s Subsidy Sheet was written by Tom Speaker and edited by John Kaehny.
Please send questions and tips to tom [at] reinventalbany [dot] org. We look forward to hearing from you!