Subsidy Sheet: Did Hochul propose reducing or increasing corporate subsidies in her State of the State?

January 17, 2025

We want to be optimists, so last week we wrote a list of five ways to fix NY’s $11 billion in annual corporate subsidies in the budget. Did the Governor include them in her State of the State?

No – though, truth be told, the Governor had some good ideas. Unfortunately, there were also some bad ones:

  • A 10-year extension of the Excelsior program, which gives businesses tax credits for keeping or creating jobs in New York. As labor economist Tim Bartik has shown, direct subsidies from government influence where businesses create new jobs 2% to 25% of the time, and other public investments (like education or job training) have been shown to be far more effective for job creation.
  • An Excelsior sweetener for companies that are part of the semiconductor supply chain (7% jobs tax credit, 3% investment tax credit). We doubt this will be used much since Micron’s supply chain is global. A big chunk of the cost of Micron’s Clay, NY fab will be Extreme Ultraviolet (EUV) machines made by Dutch company ASML. 
  • R&D reimbursable tax credit for research investments exceeding $100 million.

Last year’s budget also included some major subsidies from NY taxpayers to chipmakers. It begs the question: Will every year bring more giveaways to Micron?

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The Senate hearing for Scott Turner, the HUD nominee who led a task force supporting the Opportunity Zone program, had no shortage of propaganda about the program. Despite all evidence to the contrary, Senator Tim Scott claimed OZ communities saw “revitalization and rehabilitation become a reality without gentrifying those communities.” Turner apparently faced few questions about OZs from Democrats, other than from NJ Senator Andy Kim (Morning Star).

In other OZ news, some have raised questions about whether billionaire Doug Burgum, Trump’s pick for Secretary of the Interior, selected opportunity zones to benefit himself while serving as North Dakota’s governor (NYT). He wouldn’t have been the only one.

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Other NY corporate giveaway news from this week:

  • The head of the IUE-CWA union slammed Micron for stalling labor negotiations for the company’s planned chip fab in Clay (Central Current).
  • Senator Schumer said a deal for an $825 million Albany NanoTech chip fab – which will receive state funding – is complete (Times Union).

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