There's a push coming from some lawmakers in Albany to reform New York's tax incentive programs.
An independent audit on the effectiveness of these economic development programs was required by law.
Those lawmakers now say they hope the study can be used to reevaluate the role of Industrial Development Agencies (IDAs) and tax incentives in New York, not through a political lens but through a statistical one, examining what is working and what isn’t.
The study revealed that some state tax incentive programs provide as little as 2 cents to taxpayers for every dollar invested. That has advocates like Michael Kink, executive director of the Strong Economy for All Coalition, taking aim at New York's reliance on IDAs and economic development tax credits to drive job creation.
“There is no proof in this report that any of the programs we have actually created jobs,” he said. “We need to move money away from corporate subsidies and into investing in things that benefit communities: early education, public health, housing."
It’s an argument that is far from new, but lawmakers and advocates say they hope having data to back it up changes the game.
The study, released in the form of a 359-page report, was critical of the return on investment of several state tax incentive programs, while acknowledging that others are functioning well.
One of the lawmakers leading the charge, state Sen. James Skoufis, is pushing for change. Skoufis is working alongside state Sens. Liz Krueger and Sean Ryan, among others.
“This is the year to finally get economic development reform done,” he said. “We’ve been working on this for years and years and years.”
As for what that will look like, Skoufis said it would come down to restructuring some programs while eliminating others.
He said he is taking aim in particular at New York’s film and entertainment industry tax credits, pushing to consolidate them into one program with an audit requirement, also telling reporters if it were up to him those programs would be eliminated all together.
“That continues to remain an uphill climb, so at a minimum we should be injecting some real accountability into that space,” he said.
The governor’s office responded to the push by doubling down on the positive impact of tax credits and incentives, specifically defending the film and TV tax credits.
“We are reviewing the report,” said Justin Henry, deputy communications director for Gov. Kathy Hochul. “New York's tax credits and incentive programs are critical to growing the state's economy, boosting innovation, and creating good jobs, which is why the Legislature approved them in the first place, and Governor Hochul will continue working with members to improve the programs to maximize benefits for New Yorkers."
Republican state Sen. Brian Maher, meanwhile, told Spectrum News 1 that he feels there will be unintended consequences to scaling back these incentives.
“You’re going to drive businesses to other programs that currently exist,” he said. “The only difference is those programs don’t have local labor agreements, so what you’re really doing when tying the hands of IDAs is you’re forcing out local labor.”
Sen. Skoufis says details are still being worked out as far as what a formal package of bills would look like.