By Joseph Spector
May 29, 2013
New York spends $7 billion a year in incentives to lure and keep businesses, a report today 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,” the report from ALIGN NY, based in New York City, and the “Getting Our Money’s Worth Coalition.”
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, though, 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.
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 said.
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