Why is New York still showering individual companies with billions in taxpayer dollars?
Let’s take Upstate’s Plug Power: Despite $4 million in taxpayer subsidies per employee, New York’s super-subsidy hog is teetering on the verge of collapse (Seeking Alpha). The hydrogen fuel cell manufacturer’s stock price is running into the ground after the company reported massive losses and had to issue a “going concern” notice, which means that in the “upcoming 12 months ‘it is probable’ that the company will not have the liquidity to pay its obligations as they come due, or will violate a debt covenant.” In other words, Plug Power, which has already gotten $270 million from New York, is toast without another big bailout within the next 6-8 months.
Meanwhile, in Buffalo, the Investigative Post revealed that Tesla’s failed Riverbend solar panel factory is still getting tens of millions of New York taxpayer subsidies – something elected officials, journalists, and subsidy watchdogs did not know.
In 2016, New York State spent close to one billion dollars building and equipping a then-state-of-the-art solar panel plant and gifting it to Solar City/Tesla. That solar manufacturing did not happen, and Tesla and NYS ESD have watered down job-creation commitments so that the company can avoid millions in state fines. The Investigative Post’s latest revelation is that ESD has continued to give millions to Tesla from the $29 million that remains in the $750 million fund the state used for factory construction and solar panel fabrication machinery.
Cheers to Investigative Post for their tenacity and expertise. It took nine months for the state to provide 1,300 heavily redacted pages, devoid of many specifics. Area State Senator Sean Ryan, who is also Chair of the Senate’s Economic Development committee, had no idea about the remaining funds, saying, “At no time was it ever revealed that there’s still a hidden fund of money, taxpayer money, for Tesla seemingly to call on at their will.”
Timely reminder: The state is currently facing a budget gap of $4.3 billion, and Tesla CEO Elon Musk’s net worth is $242 billion.
–
If you got this from a friend, sign up here.
Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!