Subsidy Sheet: IDAs don’t work, waste public funds, are corruption prone

In the Buffalo News, our Policy Fellow Liz Marcello and ex-IDA-board-member Rashida Tyler break down why IDAs don’t drive economic development. Some highlights:

• “A 2019 study by economist Tim Bartik shows that about 75% of jobs created with tax incentives would have been created anyway.”
• “Not only are firm-specific subsidies ineffective at increasing economic growth, they fuel inequality.”
• “Economic development entities are vulnerable to corruption and face perverse incentives to continue doling out the public’s tax dollars to entities that actually don’t need the money.”

Other NY corporate giveaway news from this week:

• At Boondoggle, Garden State native Pat Garofalo details the recent indictments against a New Jersey political boss, involving a subsidy program, and the relationship between large campaign contributions and corporate tax breaks.
• NYC has started implementing the new 485-x tax break, which received middling reviews from both developers and tenant activists (Crain’s).
• Micron has to solve a bat problem before building its plant in Syracuse (Bloomberg).
• The Port Authority Board approved two corporate jet “home bases” at Stewart Airport in Orange County (Gothamist). Thanks to a 2004 New York State tax break, Section 1115(dd), storing and servicing corporate jets currently get an estimated $6 million in sales tax exemptions – which will rise substantially when the new “home bases” get underway. 

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