Subsidy Sheet: In the new Gilded Age, Hochul doubles down on corporate handouts

If you thought that in a time of near-incomprehensible federal graft and corruption, New York’s executive branch would be a shining beacon for good government, you thought wrong. Despite some great ideas, this year, Governor Kathy Hochul’s new budget is again loaded with handouts for the few. In our statement, we detailed the worst giveaways:

• $9.1 billion in direct cash payments to Hollywood film/TV producers over the 13 years from 2023 to 2036. The FY 2026 budget includes $1.4 billion in new state cash payments to the film/TV industry by extending the film production tax credit by two years through 2036. The film/TV production subsidy is considered the most wasteful of New York’s menagerie of billions of corporate handouts costing taxpayers $700 million a year and $75,000 per job. Additionally, the Governor suggests “removing certain restrictions on above the line qualified costs” which could mean New York State taxpayers will soon be writing big checks to the likes of Tom Cruise and Brad Pitt.
• $800 million in direct cash payments to big Broadway productions. The Governor has proposed expanding this tax credit to $400 million annually and extending it for two years through 2027.
• 10-year, $2 billion extension of the Excelsior program, which gives tax credits to businesses that create jobs in New York. Labor economist and national subsidy expert Tim Bartik has shown these tax credits only affect job creation 2 to 25% of the time.
• An Excelsior sweetener for companies that are part of the semiconductor supply chain (7% jobs tax credit, 3% investment tax credit). 
• R&D reimbursable tax credit for research investments exceeding $100 million.

Some legislators – such as Senators Gounardes, Krueger, Ryan, and Skoufis – have admirably asked why the public should continue with these handouts. But on the whole, the Senate and Assembly have continued to go along with the Governor’s giveaways. This year, we urge the Legislature to have the courage to fight back.

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Other NY corporate giveaway news from this week:

• A new analysis from Senator Gounardes’s office identified $3 billion in NYS tax breaks that the state should consider cutting (Gothamist).
• Foregone revenue per pupil from property tax exemptions is higher in districts with higher numbers of historically disadvantaged races but lower percentages of poor students, according to a new study by Drs. Christine Wen, Elizabeth Marcello (our policy fellow!), and Mildred Warner (Journal of Urban Affairs). 
• Plug Power closed on its $1.6 billion federal loan guarantee (Times Union). If completed, the company’s planned plant in upstate Genesee County will receive tax breaks worth $4 million per job.
• The town of Clay, where Micron will build its upstate chip fab, will change its noise ordinances to allow the company to be louder (Syracuse Post-Standard).
• If you enter a field that might help the chip companies receiving major government handouts, you may become eligible for free college tuition (Syracuse Post-Standard).
• Despite billions of dollars for film, TV, and Broadway, the Governor’s budget provides no new funding for New York’s town highways and bridges (WKBW). Highway superintendents are frustrated.

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