Corporate Welfare Reform for New York

by: ElanaDMIBlog

Wed May 09, 2007 at 09:50:44 AM EDT

I've written about the inadequate accountability and transparency for the hundreds of millions in tax breaks and other subsidies New York hands out to corporations every year. The subsidies are supposed to be given to help expand the local economy and create jobs but it has become clear that the public isn't getting much of a bang for its buck.

Adrianne Shropshire has written for the DMIBlog about the need to reform Industrial Development Agencies - the local agencies that issue business incentive tax breaks including how a recent audit showed that 2/3rds of the subsidies the agencies handed out didn't create the number of jobs they claimed it would. In fact she points out that an earlier study her organization, New York Jobs With Justice  issued showed that "63% of IDAs give subsidies to companies that cut jobs once they receive tax breaks"! 

More on the flip...

five upstate IDAs granted Wal-Mart more than $12 million in tax breaks between 2002 and 2005, draining school taxes from these areas in exchange for low-wage retail jobs.

As DMI Fellow Adrianne Shropshire and James Parrot of the Fiscal Policy Institute wrote in that must-read op-ed:

Starting now, IDAs must be held accountable for the tax breaks they dispense. We need safeguards in place to assure that these investments create quality jobs and help revitalize those parts of the state whose economies are lagging behind....IDA reform is the place where New York's pressing job needs and accountability to taxpayers come together

To see what another state did to combat these problems check out the video or podcast of our Marketplace of Ideas event from the Fall "Increasing accountability for economic development subsidies with Senator John Hottinger".

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UPDATE: read more in today's Newsday "Report blasts value of IDAs: Says Long Island taxing districts miss out on millions because of tax breaks given by development agencies"

The reporter Patrick Arden at Metro's article says "Report: City gave breaks to firms that cut jobs"
The folks upstate at Press & Sun-Bulletin of Greater Binghamton reported Critics say state economic development programs a failure