It is time for the New York state Legislature to ensure that jobs are actually being created with the billions of dollars that our state and local governments hand out each year under the guise of economic development.
Thirty years ago, government funding for economic development was targeted to local infrastructure development that would attract the type of jobs the community wanted. That way, if the companies departed, the investment stayed. Today, "economic development" is known as smoke-stack chasing or corporate welfare. Communities compete with one another by offering lucrative handouts and giveaways to companies to move jobs from one part of the state to another. It is increasingly a net zero game in terms of job creation. A few companies are the big winners; their competitors are put at an economic disadvantage; and the taxpayers pick up the bill.
A recent report by an upstate paper found that half of the companies receiving economic development funds from New York state fell short of their "job goals." Almost a quarter actually cut jobs. But the state often fails to recoup from the companies that fail to meet their requirements, even when many millions of dollars are involved. A stark contrast is how government officials mete out punishment when it involves a few hundred dollars to poor families receiving welfare.
It is time for action at the state capitol. Before getting our tax dollars, companies should have to certify in writing how many jobs will be created for how many hours (e.g., part-time or full-time) and for what pay; strict job reporting requirements should be imposed; and companies should be required to pay back the handouts if they fail to meet their requirements or move out of state. Companies that violate state laws (e.g. environmental, labor) should not be allowed to receive corporate subsidies.
The state law creating local industrial development authorities expires this year. This provides a perfect opportunity for the state legislature to enact some reforms. IDAs give away the tax dollars of other governments, such as towns and school districts. These governments should have the right to veto any handouts.
One real change would be to prohibit any company receiving economic development funds from making campaign contributions to state and local politicians. Too often our tax dollars are used to reward campaign contributors.
President Reagan was so upset when he found out that many big companies were paying no federal taxes that he pushed through a law requiring large companies that are publicly traded to disclose their federal taxes.
This allowed lawmakers and the public to see who was really benefiting from the various corporate tax loopholes. Similar legislation is needed for state taxes.
We need to hold businesses accountable for their economic development performance.
Pham is executive director of Hunger Action Network of New York State
A recent report by an upstate paper found that half of the companies receiving economic development funds from New York state fell short of their "job goals." Almost a quarter actually cut jobs. But the state often fails to recoup from the companies that fail to meet their requirements, even when many millions of dollars are involved. A stark contrast is how government officials mete out punishment when it involves a few hundred dollars to poor families receiving welfare.
It is time for action at the state capitol. Before getting our tax dollars, companies should have to certify in writing how many jobs will be created for how many hours (e.g., part-time or full-time) and for what pay; strict job reporting requirements should be imposed; and companies should be required to pay back the handouts if they fail to meet their requirements or move out of state. Companies that violate state laws (e.g. environmental, labor) should not be allowed to receive corporate subsidies.
The state law creating local industrial development authorities expires this year. This provides a perfect opportunity for the state legislature to enact some reforms. IDAs give away the tax dollars of other governments, such as towns and school districts. These governments should have the right to veto any handouts.
One real change would be to prohibit any company receiving economic development funds from making campaign contributions to state and local politicians. Too often our tax dollars are used to reward campaign contributors.
President Reagan was so upset when he found out that many big companies were paying no federal taxes that he pushed through a law requiring large companies that are publicly traded to disclose their federal taxes.
This allowed lawmakers and the public to see who was really benefiting from the various corporate tax loopholes. Similar legislation is needed for state taxes.
We need to hold businesses accountable for their economic development performance.
Pham is executive director of Hunger Action Network of New York State
