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By Joseph Spector

May 29, 2013

ALBANY, NY-- New York spends $7 billion a year in incentives to lure and keep businesses, a report Wednesday found, but the state doesn't adequately oversee how the money is spent.

New York has more than 15 major economic development programs, the report from labor-backed groups said, yet many of them aren't closely monitored to ensure that companies are meeting job-performance goals.

"Our findings show that New York's current spending on economic development is more of a gamble than an investment," according to the report from ALIGN NY, based in New York City, and the "Getting Our Money's Worth Coalition," which includes unions and community organizations.

Unions have increased their criticism of New York's economic-development programs because in recent years the state has limited aid for education and social services. Aid for education has increased in the past two years, totaling nearly $21 billion.

Gov. Andrew Cuomo last week proposed tax-free zones for businesses that locate near colleges. Local governments and colleges have touted the initiative, but unions and conservatives have knocked it.

"We have a long history of these programs not working," said Ronald Deutsch, executive director of New Yorkers for Fiscal Fairness. "The current ones do not work -- so why should we think it will work now."

The report contends that the $7 billion in tax breaks and grants to businesses includes wasteful spending and limited oversight.

Only a few of the programs require companies to set performance goals for job creation, while others don't seek refunds from companies that do not meet their agreements.

The largest program for state incentives is through the Empire State Development Corp., the state's economic development arm. It doled out more than $1 billion in tax breaks and grants in 2011, the report said.

The state gave out nearly $600 million in incentives through its hundreds of public authorities in 2012, while it provided nearly $370 million for film productions in the state.

The report shows that production tax credits have been given to NBC shows like "Saturday Night Live" and "30 Rock." According to the report, these shows got $77 million spread out over several seasons. The group says that the state can't show that money like this is being used wisely and creating jobs.

Cuomo has sought to streamline the economic-development funds through 10 regional development councils. The councils have given out nearly $800 million in each of the past two years for local projects, and another round of competitive grants are set to be awarded in December.


The Alliance for a Greater New York says more reforms should be made, like keeping information related to job creation online and mandating local hiring.

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