More Transparency Needed In Economic Development Programs

Gov. Andrew Cuomo says it’s irresponsible for political opposition to stop Amazon from locating a headquarters in Long Island City. The project, which Amazon pulled out of last week, would have brought 25,000 jobs to the New York City area.

Isn’t it also irresponsible to spend $3 billion in tax and other incentives without legislative approval, particularly given the state’s recent economic development record?

After spending much of January basking in the glow of progressive glory with his new Democratic Party-controlled state Senate, Cuomo finds himself at odds with some Democrats — including Andrea Stewart-Cousins, D-Yonkers and Senate Majority Leader, and Sen. Michael Gianaris — who oppose the subsidies the state is throwing at Amazon. The Associated Press reports Cuomo said he “wouldn’t want to be a senator running for re-election” after scuttling Amazon and its jobs.

Gianaris raised a good point about the subsidies recently. Why aren’t Google officials banging on the state’s door begging for subsidies and incentives to locate in New York. They, too, are bringing 12,000 new jobs by expanding Google’s offices in New York City. The planned West Village office, a 1.3-million-square-foot building, would accommodate 8,500 workers while the planned Chelsea Market expansion of 300,000 square feet, along with its plans for 250,000 square feet of office space at Pier 57, would be able to accommodate 3,500 workers.

“Now if I am Google and see that Amazon is extorting $3 billion from this state, then I am on the phone the next day saying, ‘Where is my money?'” Gianaris told Bloomberg TV. “This is the type of extortion by Amazon that’s got us into this mess in the first place. They think they can sit there in Seattle and dictate terms and hope that governments bend to their will. Well, it’s not going to work.”

It’s a good point. So is this.

State spending on economic development reached $9.9 billion in 2018, a 17-percent increase from 2016, according to the Citizens Budget Commission. A state facing a $2.3 billion budget gap this year spent $9.9 billion on economic development with precious little formal evaluation to make sure the money was spent wisely. And, as we know from the Buffalo Billion, some of that money is spent on projects that fizzle out without creating the jobs promised or are pots of money so large they invite fraud and corruption. Cuomo has proposed approval of the much-discussed database of deals that was approved by the Republican-led state Senate last year but wasn’t approved by the state Assembly. Further, the Citizen Budget Commission’s authors suggest a unified economic development budget that includes information on the costs of all economic development programs for the coming fiscal year; standardization of metrics across economic development programs to allow for comparability of results; and program design improvements so that benefits follow private sector investment, eligibility is standardized and results are evaluated regularly.

All three suggestions should be implemented as part of a database of deals. The state’s Amazon deal might not seem so bad if it weren’t poisoned by previous economic development bungles and bobbles. More transparency has long been needed in economic development programs. Perhaps their annoyance with the Amazon deal will be enough for Gianaris and Stewart-Cousins to persuade their Democratic Party colleagues to get on board with more oversight of the state’s economic development projects.