Subsidy Sheet: Albany inaction = Trump Opportunity Zone extension costing NY hundreds of millions

First, the bad news: The Trump administration included Opportunity Zones in its draft federal budget, and the program is still awful. 

But there’s good news – tax avoiders looking to gorge themselves at the OZ trough are disappointed. Here’s why:

• The initial tax breaks investors can receive are less than in the original program.
• There will be more rural zones, which means less luxury real estate (and less returns for investors).
• Only $10,000 of “ordinary income” can be used as an investment (one group hopes for $50,000).
• The program will not be made permanent.
• Investors won’t be able to invest interim gains in another zone to shortcut the “10-year” tax break (which we’ve been raising hell about since it was proposed by an influential OZ working group).
• The bill includes some basic transparency measures. We are certain this disappoints some.

Don’t get us wrong – OZs are still wasteful, misguided, ineffective, and an invitation to tax cheating. But seeing the handout’s biggest fans whine about not getting all the handouts they wanted does provide some solace in these dark times.

Reminder: According to Citizens Budget Commission, Opportunity Zones will cost NY up to $424 million a year from 2029, and NYS is likely giving tax breaks to guns, oil, and crypto under the program. We again urge the Legislature to pass Sen. Gianaris and AM Dinowitz’s bill to end NY’s OZ tax break.

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More NY corporate giveaway news from this week:

• NY State Senator Andrew Gounardes (D-Brooklyn) and other legislators introduced a package of bills meant to close some subsidies in the state tax code, including for private jets and luxury yachts (Crain’s). Good stuff, but they somehow don’t mention film/TV production, which is by far the biggest.
• Chips: The new NanoTech building – part of the state’s investment in CHIPS – will now cost $614 million, up from $550 million (Times Union). And NYC Mayor Adams is reportedly talking with President Trump about turning the Bronx’s Kingsbridge Armory into a semiconductor plant (NY Daily News). Hint – this will never happen, as it would require installation of a massive new fresh water and wastewater system.
• STAMP: Plug Power stock fell 10% on Tuesday – after falling 35% in April (Times Union, Yahoo Finance).
• The Investigative Post details watchdog criticisms of the NYS budget, including our statement on the budget’s $4.4 billion in new corporate handouts.
• Pope Leo XIV was born in what would become a Chicago Opportunity Zone (OpportunityZones [dot] com). The more you know 🌠

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