
Gotham Gazette
In their separate one-house budget resolutions passed this week both
houses of the State Legislature included a "database of deals," a public
register of state business subsidies that would shed light on billions
of dollars in government incentives to corporations.
The legislation, which has been around for years but not passed,
would require the state to publish a searchable database of state
subsidies for economic development projects that would document the
corporate recipient, the state benefits received, and number of jobs
committed to and created.
Supporters of the proposal including legislators and transparency
advocates say the tool would allow the government and the public to
evaluate the efficacy of roughly $5 billion in annual business and
economic development incentives and could make it possible to track the
total flow of state money to businesses across the state.
Passage in State Senate and Assembly budget resolutions does little
more than show significant legislative support for the proposal. In
order to become law, it would have to survive final state budget
negotiations, which are now unfolding among Governor Kathy Hochul and
legislative leaders ahead of the April 1 start of the next state fiscal
year. Alternatively, the bill could be passed at any time by the two
houses of the Legislature.
Hochul has not taken a public position on a database of deals nor did
she put it in her $216 billion executive budget or State of the State
policy agenda, both released in January.
Calls for a database of state economic development deals and subsidies have grown over the years amid related corruption scandals, high-profile failures,
evidence of pay-to-play politics, and general questions about the
necessity and effectiveness of such tax breaks and other incentives favored by former Governor Andrew Cuomo.
"The public wants to know how their dollars are being spent and we
think this database of deals legislation will go a long way to ensure
that we can capture exactly what is happening, especially in economic
development projects," said State Senator Leroy Comrie, a Queens
Democrat who has sponsored the bill.
The legislation will "help the public see which businesses are
getting state subsidies, how much they are receiving, and whether those
subsidies are creating jobs, as intended," said Assembly sponsor Monica
Wallace, in an email statement urging lawmakers to back its inclusion in
the final enacted budget.
Economic development subsidies can take many forms, from government
grants and loans to tax benefits to utility assistance. They can be
administered through a range of state agencies where reporting on them
is decentralized and often incomplete. One of the largest, the New York State Film Tax Credit Program, gives $420 million a year in tax breaks to businesses that produce films in New York.
Opaque and unaccountable subsidies have helped prop up billionaires
and political insiders. Tech mogul Elon Musk received upwards of $950
million in state incentives to open a spectacularly overvalued
solar panel factory in upstate New York that created few jobs before
being absorbed by Musk's company Tesla. Another economic development
project, the billion-dollar nanotech initiative spearheaded by Cuomo as
part of “the Buffalo Billion,” incubated one of the biggest bid-rigging
scandals in recent state history and ended with close Cuomo allies going
to jail.
Like her predecessor, Hochul has continued to tout state incentives
for major economic development projects, like the "Finger Lakes Forward"
initiative that includes a $500 million state investment promised to
“incentivize private business to invest well over $2.5 billion” to
revitalize the region and create “up to 8,200 new jobs.”
As part of that effort, on Wednesday Hochul announced that a French
yogurt and desserts company, La Fermière, “will establish its U.S.
production operations in New York State” and committed to constructing a
large new production facility in Batavia. The company, the governor’s
office said in a press release, “expects to create up to 135 new jobs in
the region.” The press release did not say what types of incentives the
company was getting from the state.