Gov. Kathy Hochul proposed increased funding for tax programs and corporate subsidies in her executive budget aims to boost economic development three years after the start of the COVID-19 pandemic, but some advocates are putting the pressure on legislative leaders to use those monies for other areas.
More than 30 good-government groups, faith leaders and other organizations sent Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins a letter Thursday urging them to freeze corporate handouts and reject expanding new subsidies in their respective one-house budgets.
They rallied in the state Capitol on Thursday against Hochul's proposal to invest millions of dollars to expand the film tax credit, and tax breaks or incentives for businesses. Hochul budgeted $75 million in new tax credits for the Excelsior Jobs program and expanded the Extended Prosperity and Innovation Campuses initiative to support new businesses — which builds off the START UP NY program.
Elizabeth Marcello, Reinvent Albany's senior research analyst, said that builds off failed corporate handouts that should be invested in the people of the state to correct wealth inequality and see benefits of economic development.
"It's wasteful, it's corrupt and it's yet another form of trickle-down economics," she said. "Albany has a massive pay-to-play problem."
The state's Film Tax Credit accounted for more than 7,700 jobs and more than $120 million in spending in the first quarter of 2022 alone, according to Hochul's office.
Hochul proposed building on Empire State Development's START UP NY program because $68 million in tax incentives supported 3,300 jobs and leveraged $1.3 billion in economic benefits in the first eight years, according to the governor's office.
"Gov. Hochul's Executive Budget builds on successful New York programs and initiatives to bring world-class businesses to our state and create good, high-paying jobs and she looks forward to working with the Legislature on a final budget that meets the needs of all New Yorkers," Hochul's spokesman Justin Henry said in a statement.
The state Department of Taxation and Finance is in the midst of auditing the efficacy of the state's tax credits, as included in last year's budget.
Advocates also argue investments in these kinds of programs should be frozen, or remain flat, until the report is completed.
The department's findings are due in a report in 2024.
Advocates Thursday also blasted the $455 million loan to redevelop the Belmont Park racetrack — another provision in the governor's budget they say is a corporate giveaway that won't create significant jobs, or give the state economy a return on its investment.
Patrick McKenna, spokesman with the New York Racing Association, said the proposal is the opposite of a giveaway because the association will repay the 20-year loan at $25.8 million per year, in full.
"This is a $455 million loan that will be repaid in full by NYRA that will create jobs, generate economic opportunity and drive tourism to Long Island and throughout the region," he said Thursday. "This is a winning bet for New Yorkers."
The association estimates the project will create about 4,000 temporary jobs and $1 billion in construction-related economic activity, and 740 full-time positions.
The project, to create new tracks, a clubhouse and parking areas, will also allow the state to repurpose the Aqueduct property and develop 110 acres near the John F. Kennedy International Airport.
But advocates maintain companies don't create good jobs off the backs of taxpayer dollars.
"We need to start redefining, rethinking and reframing what we think of as economic development," said Ron Deutsch, director of New Yorkers for Fiscal Fairness.
New York's economic development programming yields high-paying jobs, according to the governor's office, citing data that the average salary for jobs created through the Excelsior Tax Credit program is $84,000 annually, compared to the state's average annual salary of $73,000.
The Senate and Assembly's separate budget proposals will be released the week of March 13, or in close to two weeks, representatives with Heastie's office said. They would not answer questions or comment on their position on increasing corporate subsidies or other details of early budget talks.