On the Right: New York State jobs program a flop

George J Marlin

An extraordinary investigative report, New York’s Big Breaks for Business, released this month by the Gannett newspaper chain — reveals $13 billion in tax incentives granted by state and local job programs since Gov. Andrew Cuomo took office in 2011, have seriously underperformed and lack transparency on how that money has been spent.

Here’s the published summary of the study’s findings:

• Money went to initiatives that in many cases fell short of the job goals, while others did not set any benchmarks for assessing their success or failure.

• The state’s Regional Economic Councils have pledged more than $4.4 billion to 5,300 projects since 2011, but few have job-creation targets, and potential conflicts of interest emerge.

• The state’s largest incentive program, tax credits for movies and TV shows, provided more than $730 million for 273 television and movie productions since 2014 — at a cost per job of $42,000.

• One effort, the Start-Up NY Program, which provides tax-free zones to new businesses, dished out nearly $6 billion in tax breaks in addition to $53 million in ads to promote it.  It initially promised 3,324 jobs, but created a third of that as of the end of 2016.

• Local Development Corporations, run locally, gave out nearly $1.3 billion in state and local tax breaks to 1,660 projects between 2010 and 2015.  The net number of jobs came at 1,686 — far short of the 9,136 promised.

• Nearly half of jobs promised by another type of local body, industrial development agencies, fell short of their stated goals.  And while the total cost of IDA projects rose by 22 percent between 2010 and 2015, the tax exceptions for the projects grew by 44 percent.

Lest we forget, there is also a big cloud over several of Cuomo’s major economic initiatives.

Last year the governor’s closest political crony, Joe Percoco, was indicted by the feds for allegedly soliciting bribes and for “wide ranging efforts to corrupt a portfolio of upstate development projects.

Another long-time Cuomo associate, Todd Howe, pleaded guilty to extortion, wire fraud and conspiracy charges.  And Alain Kaloyeros, former president and CEO of the SUNY Polytechnic Institute, was indicted by the U.S. Attorney, on charges of bid rigging.

The governor’s much touted Economic Councils program — a new form of crony capitalism that replaced the “members items” allocations to the politically connected determined by the Assembly Speaker and Senate Majority Leader — is seriously criticized by the Gannett report.

There have not been any independent audits detailing the effectiveness of the annual council awards of $750 million.  And there are no up-to-date reports detailing the totals jobs created or retained.

According to the Gannett report, “A review of awards showed some of the largest went to companies or colleges whose leaders have sat on the councils.”

On Long Island, for instance, Stony Brook University had personnel in top council roles and in “total number of awards, Stony Brook University has far surpassed all other [universities], with 26 since 2011 — coming to $14 million overall.”

Council members defending the process claim that they act only in a planning and advisory nature.  “They are not the decision makers.”

“But” the report asks “does stepping out of the room remove influence, either at the council level or down the line?”

Finally, the report asks why it is so costly to do business in New York?

I believe every Long Islander instinctively knows its answer:

• Highest property taxes in the nation;

• New York leads the nation in tax burden for corporate headquarters;

• Costly workers compensation and insurance;

• Burdensome regulations.

These are the road blocks that have stalled the state’s economy and have caused labor outside of New York City to continue to shrink.  And until they are removed, the governor’s dubious development programs will continue to squander taxpayer’s dollars and fail to jumpstart the state’s economic engine.

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