Five Subsidy Stories You Might Have Missed This Week
1. At Boondoggle, Pat Garofalo writes about why non-disclosure agreements in business subsidy deals are bad for democracy. As Pat notes, NY State Senator Gianaris and Assemblymember Solages have a bill supported by Reinvent Albany, S1196/A9092, that would end NDAs in most NY economic development agreements.
NDAs in economic development are bad for both the economy and democracy: There’s little reason to think these mega-deals pay off for the states that make them, and by swathing them in secrecy, democratic feedback is prevented.
2. As if yacht marinas and luxury apartments weren’t bad enough, cryptocurrency miners are the latest to try to profit off Opportunity Zones, the tax break widely viewed as a Trump administration handout to cronies and real estate (Huffington Post). We hope NY’s Opportunty Zone loophole is closed in this state budget via S6800 (Gianaris)/A8081 (Dinowitz).
“Why are we taking forgone taxpayer revenue and subsidizing this, of all the things we want to spend our nation’s money on?” said Brett Theodos, an Urban Institute senior fellow and skeptic of opportunity zones. “Is crypto mining a bad thing? Maybe yes if you’re the environment, maybe not for an individual community. But is it something we need to be subsidizing, as the federal government, in order to produce? I’m not clear why we’d want to do that.”
3. The Community Service Society of New York released a report detailing how New York’s 421-a tax break for real estate developers and landlords has been a grotesquely expensive way for taxpayers to create affordable housing. Numerous housing advocates have said that the Governor’s proposal to replace 421-a does not go far enough (and don’t miss great reporting on 421-a this week from NY Focus, The City, and Politico!).
Ultimately, we argue that the fatal flaw is in the program’s initial inception: it was designed in 1971 for a real estate market that looks nothing like the city today. No matter how many amendments the legislature makes to the program, it remains primarily a tax break for the wealthy, not a driver of housing affordability.
4. A new report by Good Jobs First found that Amazon has received at least $4.7 billion from taxpayers globally – and hundreds of millions have come from New York.
“State aid is intended to help companies grow their operations in areas they otherwise wouldn’t, and help disinvested communities receive an economic jolt,” said Hoffman. “Amazon’s operations do neither; indeed, in providing Amazon subsidies, governments are aiding and abetting a multinational corporation that underpays workers, drives down wages, contributes to the demise of small businesses and engages in anti-competitive behaviours.”
5. Good Jobs First Executive Director Greg LeRoy shows how states can improve electric vehicle incentives and avoid wasting billions (Nonprofit Quarterly). Last month, Governor Hochul invested another $12 million in a program to help consumers save on the cost of electric vehicles.
Instead of frittering away their budget surpluses on corporate giveaways, states and localities can advance a green economy with equity. This could include investing in electric transit buses to improve air quality in environmental justice communities, and in training—and retraining—for auto mechanics to transition to service electrical vehicles.
If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker, Policy Analyst at Reinvent Albany. Please send questions and tips to tom@reinventalbany.org. We look forward to hearing from you!