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Albany, NY — Immediately preceding today’s NYS Budget Hearing on Economic Development, legislators and advocates from a wide range of community, labor, and good government groups held a press conference in Albany calling for comprehensive reforms to the State’s inefficient economic development system.
New York State spends approximately $7 billion annually on economic development, yet there is little evidence that this spending is successful in actually creating jobs. Because subsidies are funneled through hundreds of disparate economic development entities at the state and local levels, a lack and consistency and transparency makes it impossible to know how many – if any – jobs are being created.
“Our state needs a budget that works for everyone, not just wealthy corporations,” said Anita Halasz, Executive Director of Long Island Jobs with Justice. “At a time when government services are being slashed and working people are struggling to make ends meet, New York needs to prioritize projects that lift up local communities through the promise and delivery of good jobs.”
Advocates are calling for transparency and accountability – including clawbacks – for all economic development spending in New York. “Far too many corporations are getting public dollars from New York’s economic development system and aren’t creating the jobs they promised,” said Jennifer Diagostino, Executive Director with the Coalition for Economic Justice. “It’s time our elected leaders in Albany hold corporate subsidy recipients accountable. If they can’t show us the jobs, they should pay us back.”
Recently, Assemblyman Sean Ryan introduced the Just and Open Business Subsidies Act (JOBS Act), which would institute mandatory clawback provisions to ensure that companies live up to the promises they make; require better reporting on both the number and quality of jobs created by subsidy recipients; and create a one-stop website to allow the public to see where these taxpayer dollars are going.
“We all know that our current IDA system is broken and in desperate need of reform,” said Assemblyman Sean Ryan. “The vast majority of projects approved by IDAs are not living up to job creation goals, and we need a system with tighter controls to ensure only projects that truly benefit our economy are being approved.”
“We also know that IDAs are approving tax subsidies without considering the consequences, determining whether subsidies are actually necessary, or giving the public adequate input and an opportunity to properly scrutinize projects,” says Assemblyman Ryan. “The JOBS Act addresses these problems and puts significant new reforms in place to ensure transparency and accountability.”
Many labor and community advocates who attended today’s press conference spoke of their direct experiences with the unintended negative impacts economic development tax breaks can have on local communities. Tim Brown, President of the Valley Central Schools Teachers’ Association explained: “The tax breaks given to [Whole Foods supplier] UNFI in the Hudson Valley area will have a direct impact on our schools’ budgets for many years to come. A student who starts kindergarten next year will graduate high school before UNFI is paying their full share. Meanwhile, we’ve had to cut our arts and music programs”
Many companies receiving subsides have actually lost jobs instead of creating them. After receiving $800 million in subsidies, IBM cut nearly 4,000 jobs—and IBM recently indicated that even more cuts are coming to its Poughkeepsie facility. Carolyn Phillips, a member of Community Voices Heard, lost her job at IBM in an earlier round of layoffs. “I went from having a decent job to having my condo in foreclosure. I don’t think the people of Dutchess County and New York State should blindly reward a company that has shown so little commitment to its workers and its community.”
“Unfortunately the situations at IBM and UNFI are not isolated incidents – they point to a basic lack of accountability built into the current economic development system,” said Matt Ryan, Executive Director at ALIGN. “This is exactly why we need reforms such as those in the JOBS Act, to ensure that our taxpayer money actually goes to creating the good, family-supporting jobs New Yorkers deserve.”