Cure NY’s addiction to corporate welfare – Boston Herald

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Governor Hochul this week announced a deal with the National Football League and the Pegulas, owners of the Buffalo Bills, to spend more than $1 billion in public funds on a new NFL stadium. But that’s just the tip of the proverbial iceberg when it comes to the Hochul administration’s love of spending taxpayer dollars on corporate subsidies.

In fact, in addition to the stadium, his administration has proposed billions in new spending to the Empire State Development Corp., the state’s main economic development agency. This does not include the $5 billion that county industrial development agencies spend each year on business grants.

Put it all together and it amounts to billions of state dollars transferred from public taxpayers to private companies every year to support a model of economic development that a significant amount of research and real-world experience, in New York, and throughout the country, has proved to be a dismal failure. Indeed, the administration’s nominee to lead the ESDC, Hope Knight, couldn’t even answer basic questions about the effectiveness of the economic development program or the quality of jobs during an earlier hearing. This year.

The state can and must do much better.

Our organizations and several partners released “The Dirtiest Dozen” last week, a report outlining 12 of the worst corporate grant deals New York has made in the past decade. Among them: an agreement with Plug Power, which received $4 million from the state per job created; the so-called “Buffalo Billion,” which created a slew of bribery convictions instead of jobs; the Midtown New York City Movie Center, which was built with $15 million in taxpayers’ money and sold for just one dollar; Amazon receives hundreds of millions of dollars for collapsing local New York businesses; and pharmaceutical manufacturer Medline claiming it needed public funds to build a new facility, but when that money was denied, go ahead and build anyway, essentially admitting its request was a sham.

These episodes are disturbing individually, but when put together they reveal the breadth and depth of the problems inherent in the way the state has conducted economic development. And there’s so much secrecy and sleight of hand built into the system – with deals covered by non-disclosure agreements and negotiated behind closed doors with little public participation, and many actors involved having significant conflicts of interest – that we are surely missing out on some of the worst abuses.

Tellingly, one of the best ways to determine whether a state will increase its spending on business grants in any given year is not to look at an economic indicator, but simply to see if the incumbent governor shows up. to re-election. The Hochul administration is trying to build political power and reward political allies, not create a sustainable economic base for the state’s residents.

Not only has Hochul offered to redouble efforts to improve his own political fortunes, but his administration seems utterly reluctant to embrace any reform of current economic development programs. The distinct impression is that the administration thinks a system that has repeatedly failed to deliver on promises other than campaigning for donors and billionaires is fine as it is.

Fortunately, the legislator does not stand idly by. Both the Senate and State Assembly have included key reforms in their respective budgets, including mandating the creation of an agreement database that will allow anyone to review a grant agreement and it creates the promised jobs, as well as allowing the state comptroller to audit economic development agreements, a power that was removed by the Cuomo administration. Other reforms proposed in the Legislature include banning nondisclosure agreements in business grant agreements and barring companies like Amazon from receiving grants to expand their warehouse networks.

But transparency, ultimately, will only get the state so far. A great deal of research has shown that investing in people – workers, families, students, children – is a much better use of public funds than bribing companies to set up facilities in a particular location. The state should reprogram the money currently spent on unnecessary business subsidies and wasted sports stadiums and spend it instead on education, children, labor and infrastructure that supports local businesses. . Invest in the people who make New York great and economic prosperity will follow.

Garofalo is director of national and local policy at the American Economic Liberties Project. Kink is executive director of the Strong Economy for All coalition.

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