Subsidy Sheet: $4.4 billion in NEW corporate subsidy payouts included in Albany budgets

In the face of the layoffs of hundreds of New York scientists and health researchers because of Trump funding freezes, a $35-billion-plus MTA capital plan gap, and hints about big cuts to federal Medicaid funds, the Legislature decided this week to match the Governor’s proposal to give away at least $4.4 billion in new taxpayer payouts to corporations. 

This fiscal insanity is probably viewed as politically sensible in Albany because the corporate interests and their labor allies are big campaign contributors, and the press and public are so distracted by Trump administration antics that they can’t be bothered to focus on something as small-bore and abstruse as billions in corporate subsidies.

The Governor and Legislature’s budgets all include these new taxpayer payments to corporations:

• $1 billion (at least) in new Excelsior reimbursable tax credits (the Governor proposed $2 billion). This useless subsidy is purported to encourage employers to create and retain jobs in New York despite no evidence that it is effective and lots of evidence that it is not. Economist and job location expert Tim Bartik has collated data from dozens of studies that show subsidies like Excelsior only affect where jobs are somewhere between 2% and 25% of the time.
• $2.6 billion in new film/TV reimbursable tax credits, including a new tax credit for “independent” films totaling $1.2 billion. This is a truly unconscionable waste of public funds. The state’s own study found that state taxpayers lose at least 70 cents on every dollar spent on Film/TV subsidies. The Film/TV production subsidy costs taxpayers $75,000 per job per year and produces zero social benefit (the public pays a worker to build a bridge and the public gets a bridge. Pay them to make a movie and the public gets what?).
• $800 million in new Broadway reimbursable tax credits despite the same state study finding that New York loses 77 cents on each dollar spent on the subsidy.

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The Times Union editorial board defends the federal CHIPS program, which President Trump called on Congress to kill. It may make sense for the federal government to subsidize US chip manufacturing for geopolitical reasons, but New York State taxpayers (who are also federal taxpayers) should not have to pay twice for national security and industrial policy.

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