Facing a wave of public skepticism, the NYS Economic Development Council released an analysis this week claiming that NY’s Industrial Development Authorities (IDAs), rather than being termites eating local tax bases and diverting billions from public schools, are a crucial economic engine for the state.
The analysis, conducted by Camoin Associates, a firm whose business depends on authorities like IDAs, relies on the typical pro-corporate-giveaway logic that “but for” IDA tax breaks, no businesses would ever come to New York State – a ridiculous argument that has been repeatedly refuted by independent experts for decades.
Let’s pick apart the analysis’s fatuous “findings”:
- “For every dollar of taxes abated, IDA projects generated $6.57 in new tax revenue for NYS.” Camoin assumes the businesses generating this local tax revenue would not exist where they are without IDAs’ tax abatements. Upjohn Institute economist Tim Bartik’s 2018 mega-study used a huge national data sample to utterly rebut this. Bartik found that tax abatements only impact where businesses decide to locate 2% to 25% of the time.
- “For every one dollar of exemptions issued, $74.89 in employee earnings was generated in the state.” This too suggests that companies wouldn’t hire anyone without the tax exemptions. Alan Peters and Peter Fisher at the University of Iowa, however, found that 9 out of 10 hiring and investment decisions happen without subsidies.
- “In 2021, IDA projects created $830 million in new tax revenue to local taxing jurisdictions including $338.9 million in payments to school districts across the state.” But Good Jobs First found that NY schools actually lost $1.8 billion to tax abatements the same year.
So let’s get this straight: Camoin, which subsists on payments from public authorities, was paid to do a report by the NYS EDC, which subsists on payments from IDAs, which subsist on payments from companies, which partly subsist on tax breaks from IDAs, all so that companies could get even more handouts on the taxpayers’ dime. It’s the kind of corporate handout ouroboros we’ve come to expect from New York.
Other NY corporate giveaway news:
- The Times Union editorial board on the NYS EDC study: “The state’s answer to questions about programs’ efficacy shouldn’t be, in essence, ‘But look at everything we’re doing right.’ It should be, ‘Here’s how we plan to do better.’ One is spin. The other is accountability.”
- NY Assemblymembers held a little-noticed hearing asking why Empire State Development is dragging its feet on workforce development (Spectrum News).
- Lee Harris has a must-read article on the “hydrogen hype cycle” – how companies like Plug Power, which has never turned a profit, win government subsidies, then try to loosen the definition of “green” hydrogen in order to win even more subsidies (American Prospect).
- STAMP, the site that hosts Plug Power, is getting a $56 million handout from the state (Buffalo News). Plug Power is receiving subsidies worth $4 million per job.
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.
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