Hochul Budget Delivers at Least $4.4 Billion in New Corporate Handouts

May 12, 2025
The FY 2026 budget includes billions in new corporate subsidies. The bulk are reimbursable tax credits that will NOT be reduced by across-the-board cuts to state spending if federal aid is slashed.
 

Reinvent Albany has documented $4.4 billion in new corporate subsidies – most of them reimbursable tax credits – in the FY 2026 budget just approved by the Governor and Legislature. New York State is spending roughly $5 billion a year in taxpayer funds on corporate subsidies, plus local governments are spending another $7-8 billion, totaling roughly $12 billion spent every year by taxpayers on handouts to businesses that provide very little payoff to the public. Unfortunately for New Yorkers, independent researchers from across the political spectrum have repeatedly shown government handouts to corporations are a waste of taxpayer funds, and have utterly debunked the various industry claims cynically repeated by donation- and endorsement-hungry politicians. 

Major New Spending on Corporate Subsidies in the FY 2026 Budget

$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 as much as $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?).

$1 billion in new Excelsior reimbursable tax credits
Economist Tim Bartik of the Upjohn Institute for Employment Research in Michigan is the top U.S. expert on how government subsidies influence where jobs are created. Bartik has collated data from dozens of studies that show subsidies like Excelsior only affect “job location” decisions between 2% and 25% of the time. 

$100 million in additional Broadway reimbursable tax credits
The theater subsidy was expanded from $300m to $400m total and extended from 2026 to 2028 despite the same state study finding that New York loses 77 cents on each dollar spent on this handout.

Cost of Three New Semiconductor Supply Chain Subsidies are Hidden

Because the Governor and Legislature continue to ignore requests by watchdog groups to provide tables with basic information in the budget, we cannot determine how much each of the three new semiconductor supply chain projects in Part H of the Revenue budget costs.

Facts About NYS Reimbursable Tax Credits, the Largest Corporate Subsidies

  1. By far the biggest state subsidies are in the form of reimbursable tax credits – not wasteful mega-projects like the Bills stadium. State reimbursable tax credits are the same as a state grant covering a share of a business’ expenses. (For instance, a Hollywood producer gets state taxpayer dollars for 30% of the cost of a production.)
  2. By far New York’s biggest recurring corporate subsidy is the film/TV production tax credit, which has cost taxpayers $4.7 billion over the last ten years. 
  3. Because they are written into the tax code, reimbursable tax credits are like magic grants that are off-budget, not subject to appropriation, and subtracted from tax revenue before it is sent to the state’s general fund. Thus, they are accounted for as losses in revenue, not expenditures. 
  4. Crucially, and again because of how they are written into tax law, reimbursable tax credits are not classified as state “spending.” This means they will not be affected by across-the-board cuts in state spending resulting from reductions in federal aid. 

More NY corporate giveaway news from this week: