Subsidy Sheet: Stirrings of a Revolt Against Nondisclosure Agreements Used to Hide Corporate Subsidies

After plans in Arizona’s Pima County to allow a developer to build a water- and power-intensive data center for Amazon faced massive public opposition, county supervisors adopted a new policy to limit the use of nondisclosure agreements for development projects, including restrictions on their length and requirements that they be reported to the county. That may not sound like much, but as Pat Garofalo points out in Boondoggle, it’s “the first jurisdiction to affirmatively reform its economic development nondisclosure process in the wake of a problematic deal.” The full list of newly adopted policies includes:

• An initial 180-day limit on NDAs, with additional extensions requiring board approval.
• Reporting of all NDAs to the board every six months.
• NDAs must list which information is proprietary, and may not include information on the use, size, or water and power requirements of the project.

In New York State, no one knows how many development projects have key details obscured by NDAs. But watchdogs have flagged a few, including the new Amazon fulfillment center in Clay, NY just north of the Syracuse city line which is getting $70.8 million in tax breaks from the Onondaga County Industrial Development Agency. (Clay, population 61,000 is vying for the Subsidy Hall of Fame, and is also the home of a Micron mega-chip fab which is getting billions in federal and state handouts). A bill by State Senate Deputy Majority Leader Sen. Michael Gianaris (S373) which would ban NDAs entirely in government development deals has passed the Senate multiple times, but the Assembly version sponsored by Rep. Michaelle Solages (A409) has yet to be taken up by the Assembly. Garofalo adds that the Gianaris bill would be “great” not just in New York, but as an example for other states to follow in reining in billions of dollars of super secretive deals paid for by taxpayers.

In Michigan, the state assembly voted earlier this year to ban NDAs, but the legislation (HB4052 and HB4053) has since then been awaiting action in the Senate. (R-Three Rivers) co-sponsored the bipartisan bills. “They’re using tax dollars to fund these projects,” said Michigan state rep Steve Carra, “And then the idea that we as legislators would be complicit in that process and signing secrecy pacts, saying we cannot disclose the conversations we’ve had is a reckless form of governance.” Reckless, yes, and doubly offensive to democratic transparency, since the public not only doesn’t know the details of how the elected officials they voted for are spending their tax dollars, they don’t even know when the details are being withheld.

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More NY corporate giveaway news from this week:

• Speaking of data centers, Good Jobs First has a new FAQ on questions that elected officials and community members should ask when one of these energy-sucking projects is proposed, including: Will the project require tax breaks or zoning variances; how much air, noise, and light pollution will it create; are there NDAs in place; what company will be the beneficiary; and is there a better use for the site? “By the time the public learns about a proposed data center, it’s often too late,” notes Good Jobs First, so it’s important to start asking detailed questions from day one.
• Reinvent Albany and Good Jobs First have teamed up to reveal that a flaw in New York State’s property tax formula means tax breaks for developers cost the state’s school districts much more than the $1.8 billion a year that was previously estimated. Without reforms to the way counties’ property tax caps are calculated — and limits to how many tax breaks IDAs can hand out — New York’s schools, which are already more dependent on property tax receipts than most other states, will continue to be drained of funding in order to subsidize wealthy businesses. 
• New York State is on pace to hand out $920 million in payments to TV and film producers in 2025, with Saturday Night Live leading the way with $21 million in tax credits in just the first three months of the year. A 2023 study of the state’s tax credit program found that even if you assume that every TV and film production would move out of state without the tax credits — which almost certainly is not the case — New York only gets back 31 cents in taxes for every dollar it spends on the program.
• Micron has issued its first renderings of what its proposed computer chip factory in Clay would look like, if it gets fully built out, which no one knows if it will or not thanks to its non-binding term sheet. Not pictured in the images: the house of a 91-year-old woman who the Onondaga County IDA promised could live out her last years in the house when she and her husband sold it to the county in 2005, but who the IDA has now given a 90-day eviction notice to; her family says they plan to file suit to block the eviction.

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