Economic development transparency in New York refers to the public availability and clarity of information regarding the billions of dollars in tax incentives, subsidies, and grants awarded by state and local governments to businesses. This page covers CBC’s work on the Database of Economic Incentives, unified economic development budgeting, standardized performance metrics, oversight of Industrial Development Agencies and Local Development Corporations, and the evaluation of tax credit programs.
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New York should ensure that tax credit programs are designed in ways that reward actual performance in key sectors, rather than hiring or investment that would have happened anyway, and should also independently evaluate those programs on a regular basis.
New York should keep what works and amend, narrow, or eliminate programs that are ineffective.
Lawmakers should consider waiving tax secrecy provisions to grant evaluators access to the tax records needed to evaluate programs effectively, while ensuring confidentiality is protected.
The State should avoid picking winners and losers by offering incentives perfectly tailored to a specific industry or firm.
The State should use performance-based incentives, as the comparatively strong return on investment of the Excelsior tax credit suggests that the program is generally well-designed and well-targeted.
New York should amend its film production tax credit program to target incentives to the segments of the film industry that are at risk, while reducing or eliminating the incentives that generate little to no impact.
Key Data
As of November 2024, economic development programs cost New York State and its localities $11 billion a year, but policymakers have historically operated without independent evaluations to prove these incentives deliver a sufficient return on investment.
In November 2024, the CBC highlighted independent evaluation findings showing that the State's film production and post-production tax credits return less than 30 cents in State tax revenue for every dollar awarded, despite costing over $5.8 billion since 2007.
In February 2023, the CBC pointed out that a package of NYC tax incentives costing $44 million annually was proposed for extension despite a 2018 independent evaluation finding that two of the programs failed to significantly improve office vacancy rates or employment.
In April 2022, the CBC welcomed the codification of the Database of Deals but warned of loopholes, noting it only requires publishing data on deals since 2018 and allows incomplete reporting under 'to the extent practicable' provisions.
In December 2019, the CBC's analysis of 1,090 economic development projects funded in 2017 and 2018 showed that only 59% of projects related to a regional or State strategy, with the Finger Lakes region lagging all others at just 18% alignment.
Most economic development tax incentives in New York fail to pay for themselves and lack evidence of effectiveness, necessitating a shift toward rigorous, independent evaluation and performance-based programs. The state should retool costly, ineffective tax breaks—particularly in the film industry—to target only at-risk sectors while focusing on foundational economic improvements like infrastructure and public services.
Recommendations related to Economic Development Transparency
New York should ensure that tax credit programs are designed in ways that reward actual performance in key sectors, rather than hiring or investment that would have happened anyway, and should also independently evaluate those programs on a regular basis.
New York should keep what works and amend, narrow, or eliminate programs that are ineffective.
Lawmakers should consider waiving tax secrecy provisions to grant evaluators access to the tax records needed to evaluate programs effectively, while ensuring confidentiality is protected.
The State should avoid picking winners and losers by offering incentives perfectly tailored to a specific industry or firm.
The State should use performance-based incentives, as the comparatively strong return on investment of the Excelsior tax credit suggests that the program is generally well-designed and well-targeted.
New York should amend its film production tax credit program to target incentives to the segments of the film industry that are at risk, while reducing or eliminating the incentives that generate little to no impact.
Key Data
$11 billion
— Annual cost of economic development programs to New York State and its localities.
30-cent
— Return for every dollar of tax credits in some cases.
$5.8 billion
— Amount New York State has spent on Film Production, Film Post-Production, and Commercial Production Tax Credit programs since 2007.
17.6 percent
— New York’s share of national film production employment in 2022.
$878 million
— Cost to Georgia in foregone tax revenue for its film tax credit in fiscal year 2023.
17,000
— Number of film production jobs in Georgia in 2022.
New York State and its localities spent $10.7 billion on economic development in 2022, a figure projected to reach $13 billion annually by 2025 despite a lack of evidence that these programs effectively create jobs. To address this, officials should implement a unified budget, adopt performance-based incentives, and increase oversight to ensure these massive expenditures are actually beneficial.
Recommendations related to Economic Development Transparency
Rigorously evaluate existing incentives and programs to determine their effectiveness.
Narrow, shrink, or eliminate programs that are not proven effective.
New York State and its localities spend approximately $10 billion annually on economic development programs, yet many of these initiatives, such as the proposed $14.6 billion film tax credit expansion, lack rigorous evidence of their effectiveness. To ensure public funds are used productively, the state must conduct thorough evaluations of these incentives and direct resources toward proven investments like human capital and infrastructure.
Recommendations related to Economic Development Transparency
New York should stop its habit of allocating huge sums of economic development spending without real evidence of impact.
A thorough, rigorous evaluation should identify whether a given incentive program had induced additional economic activity and compare that benefit to the cost.
New York should use appropriately rigorous evaluations to direct spending to cost-effective programs that grow the economy.
Key Data
$10 Billion
— Estimated annual economic development spending by New York State and its localities.
$6.5 Billion
— Total film tax credits already granted by New York without a rigorous analysis of their effectiveness.
$14.6 Billion
— Proposed lifetime cost of the expanded film tax credit, up from $9.6 billion.
$455 Million
— Proposed state funding or borrowing support to renovate and expand Belmont Park.
$44 Million
— Annual cost of four city tax incentives proposed for extension despite a lack of evaluation or demonstrated effectiveness.
$700 Million
— Proposed annual credit cap for the Empire State Film Tax Credit, up from $420 million.
New York City's economic development tax incentives, including the Commercial Revitalization Program and Commercial Expansion Program, cost the city $44 million annually in foregone revenue despite previous evaluations finding them ineffective. These programs should not be extended without rigorous, prospective analysis to determine if they actually achieve their intended goals or simply subsidize activity that would occur regardless.
Recommendations related to Economic Development Transparency
An incentive should not be extended absent a rigorous evaluation of its effectiveness and efficiency and an analysis demonstrating it is needed to meet current and future goals.
Any extension or expansion of an existing tax expenditure should be supported by a prospective model of its impacts and justified by an evaluation that determines whether the tax expenditure achieved its purpose.
For programs like CEP and CRP, existing evaluations should inform the Legislature’s decision of whether to extend, amend, or sunset these programs.
Key Data
$44 million
— Annual cost in foregone revenue for the package of New York City economic development tax incentives.
$14 million
— Annual cost in foregone property tax revenue from the economic development tax incentive programs.
$15 million
— Annual cost in foregone utility tax revenue from the economic development tax incentive programs.
$7 million
— Annual cost in foregone commercial rent tax revenue from the economic development tax incentive programs.
$8 million
— Annual cost in foregone sales tax revenue from the economic development tax incentive programs.
$10 million
— Annual property tax expenditure for the Commercial Expansion Program (CEP).
New York has codified a "Database of Deals" to improve transparency in economic development spending, though the legislation contains loopholes regarding the scope and timing of data publication. Additionally, the state extended a costly film tax credit for three years, despite calls for it to be phased out due to a lack of commensurate economic impact.
Recommendations related to Economic Development Transparency
Watchdogs will need to be as vigilant as ever to ensure that the Database is appropriately comprehensive in its implementation.
The state should bolster the Database.
The state should compile a unified economic development budget.
The state should support other programmatic reforms.
The film tax credit should be phased out and ultimately eliminated.
New York State's fiscal year 2023 budget agreement lacks necessary transparency regarding economic development programs, specifically regarding the definition of jobs and the scope of the Database of Deals. A comprehensive, public performance management system is needed to ensure accountability and efficiency in state spending.
Recommendations related to Economic Development Transparency
The State should standardize how a job is defined in economic development programs.
The State should enlarge the Database of Deals to cover all economic development programs, not just those of ESD.
New York should implement a comprehensive, public performance management system to improve quality, efficiency, and accountability.
The State should phase out and ultimately eliminate the film tax credit, as it is an expensive program that does not provide commensurate value.
New York's economic development portfolio lacks meaningful management and accountability, despite the state spending roughly $10 billion annually on these programs. To improve transparency and results, the state should establish a unified budget, standardize performance metrics, and enhance the public database of economic incentives.
Recommendations related to Economic Development Transparency
The State should establish a unified economic development budget to improve oversight and management.
The State should standardize metrics for economic development programs to ensure results.
The State should enhance the Database of Economic Incentives to improve transparency.
The State should improve program design and evaluation for economic development initiatives.
The State should support oversight authorities by restoring procurement powers to the Comptroller and increasing funding for the Authorities Budget Office.
Key Data
$10 billion
— The annual price tag of the State’s economic development spending.
$25 million
— The amount appropriated for “data analytics” to improve performance measuring and evaluation.
$10 billion
— The adjusted year-to-year spending growth in State Operating Funds for fiscal year 2023.
New York's economic development deals, including tax breaks and subsidies, cost $10 billion as of 2019, yet these programs lack sufficient accountability and transparency. Reforms are needed to consolidate local authorities, standardize performance metrics, and improve oversight to ensure these expenditures effectively create jobs.
Recommendations related to Economic Development Transparency
The State budget should include overdue reforms to the management, transparency, and accountability of economic development programming by State agencies and authorities.
The State should implement a unified economic development budget to improve fiscal oversight.
The State should adopt standardized metrics for economic development programs to ensure consistent evaluation.
The State should create an enhanced Database of Economic Incentives to improve public visibility into deals.
The State should provide appropriate oversight by restoring procurement powers to the Comptroller and increasing funding for the Authorities Budget Office.
Local development authorities should be consolidated, subject to stronger oversight, and regularly evaluated.
The State should consider how economic development programs align with other State goals, such as climate and greenhouse gas reduction targets.
Key Data
$10 billion
— The cost of State and local economic development deals, including tax breaks and direct subsidies, as of 2019.
The Fiscal Year 2023 Executive Budget presents an opportunity to build a sound fiscal future by restraining recurring spending and ensuring state programs are managed for results. To achieve this, the state must implement a performance management and accountability process to ensure that economic development programs and other initiatives actually deliver intended outcomes.
Recommendations related to Economic Development Transparency
The State should implement a performance management and accountability process to ensure that State economic development programs deliver results.
New York State spends $10 billion annually on economic development programs without rigorously evaluating their effectiveness or demonstrating sufficient results. To improve oversight, the state should implement a unified budget, standardize performance metrics, and enhance the transparency of its Database of Deals.
Recommendations related to Economic Development Transparency
The State should present a unified economic development budget so that New Yorkers know how much is really being spent.
The State should establish standardized metrics for economic development initiatives to identify the impact of each deal and program.
The State should improve its Database of Deals to publicly and regularly report on the cost, progress, and evaluation of all economic development initiatives.
Program design should be improved by requiring private “skin in the game,” performance metrics and penalties for non-performance, and evaluation.
Procurement oversight powers of the Comptroller’s Office should be restored, and funding for the Authorities Budget Office should be increased.
Key Data
$10 billion
— Total cost of economic development programs administered by various agencies and entities in New York State in 2019.
8 of the 20
— Number of criteria for a sound database that the current Database of Economic Incentives meets, out of the total identified by watchdogs.
New York's planned increases in economic development funding lack necessary plans to improve decision-making or evaluate investment outcomes to ensure they deliver results. The state must prioritize transparency and accountability in these programs to ensure they effectively contribute to the state's future prospects.
Recommendations related to Economic Development Transparency
The State must improve the decision-making about or evaluation of economic development investments to ensure they are delivering results.
Key Data
$3.5 billion
— The looming fiscal cliff facing the State's budget in the short and medium term.
New York State should implement a Unified Economic Development Budget to consolidate all program costs and improve transparency in the Database of Economic Development Incentives. Standardizing performance metrics and definitions for job creation across the state's ten economic regions will allow for better evaluation of whether economic development spending effectively creates and retains jobs.
Recommendations related to Economic Development Transparency
The Executive and Enacted budgets should include a Unified Economic Development Budget (UEDB) that includes the costs of all economic development programs for the coming fiscal year.
The State should improve its reporting of economic development activities in the Database of Economic Development Incentives, which currently lacks key information.
The Database of Deals should report standardized performance metrics across all programs to allow for comparison of results.
Definitions for job creation and retention should be standardized for all programs and metrics should differentiate between full-time, part-time, and temporary jobs.
For each of the 10 economic regions, the State should measure broader outcomes, including growth in targeted industries, overall economic growth, and changes in poverty levels.
Existing programs, including Regional Economic Development Council spending and various subsidies, should be evaluated to determine how effectively the resources are creating and retaining jobs.
Key Data
10
— Number of economic regions for which the State should measure broader outcomes, including growth in targeted industries, overall economic growth, and changes in poverty levels.
The proposed Penn Station Area Civic and Land Use Improvement Project lacks sufficient detail regarding its financing, capital costs, and the City's role in the decision-making process. To ensure fiscal responsibility, the State must provide greater transparency on how it intends to fund the project and how it will manage the risks associated with its value capture strategy.
Recommendations related to Economic Development Transparency
ESD should provide additional information to answer questions about the scope of capital improvements and the estimated cost for each phase before proceeding with the GPP.
ESD should clarify how much of the project New York State will fund and what portion of that would be funded through value capture.
ESD should explain how the financing plan will be structured and how it will handle risks inherent to value capture projects.
The City of New York should have a substantive role in the planning process and be a partner that agrees to the use of tax revenue.
There should be additional public discussion about the merits of the financing strategy compared to other alternatives.
Discretionary tax abatements should be considered in context, taking into account broader economic conditions.
Key Data
$17 billion
— The reported cost of the entire Penn Station project, including renovation, expansion, land acquisition, demolition, and public space improvements.
$6 to $7 billion
— The estimated cost of a scaled-back renovation project without the proposed Penn South expansion.
$1.3 billion
— The amount included in the State’s Fiscal Year 2022 Enacted Budget for Penn Station-related projects.
50 percent
— The anticipated share of funding from the federal government for the project.
25 percent
— The anticipated share of funding from New Jersey for the project.
25 percent
— The anticipated share of funding from New York for the project.
New York City should improve the management and transparency of its economic development programs by publishing a comprehensive database of incentives, including details on benefits paid and jobs created. Additionally, the city needs to evaluate the return on investment for existing as-of-right programs and refocus the Economic Development Corporation on its core mission rather than peripheral operations.
Recommendations related to Economic Development Transparency
The incoming Administration should increase transparency by publishing a comprehensive database of economic development incentives, including benefits paid, jobs created, and economic impact.
The incoming Administration should assess the impact and return on investment of as-of-right programs, including the Industrial and Commercial Abatement Program (ICAP), the Relocation and Employment Assistance Program (REAP), and Lower Manhattan incentives.
The City should focus the Economic Development Corporation (EDC) on its core economic development mission rather than ferry operation or capital procurement.
The incoming Administration should clearly articulate economic development priorities and strategies and focus on how performance-based as-of-right incentives can help drive a broad, sustained recovery.
New York State local governments provide $5.6 billion annually in financial assistance to businesses through entities like local development corporations, yet little is known about the effectiveness of these resources. Authorizing the Office of the State Comptroller to audit these corporations is necessary to ensure accountability and prevent the misuse of public funds.
Recommendations related to Economic Development Transparency
The Governor should sign A7476/S5445 to provide needed oversight by authorizing the Office of the State Comptroller to audit local development corporations.
Key Data
$5.6 billion
— annual financial assistance provided by New York State local governments to businesses directly or through municipally controlled Industrial Development Agencies and local development corporations.
192
— number of local development corporations focused on economic development that operated in 2017.
$1.2 billion
— total amount spent by 192 local development corporations focused on economic development in 2017.
a quarter
— approximate portion of local development corporations that fail to submit required annual reports.
New York's Regional Economic Development Councils (REDCs) often lack transparency and fail to align projects with long-term economic strategies, resulting in dispersed funding that may not effectively spur growth. To improve outcomes, the state should mandate standardized performance metrics, prioritize projects tied to established regional strategies, and increase the weight of local assessments in funding decisions.
Recommendations related to Economic Development Transparency
Only projects tied to an established regional or State strategy should be eligible for economic development-related financial assistance.
The REDC process should utilize quantifiable criteria by which target industries are identified.
REDCs should focus projects in major population centers—the anchor metropolitan areas in a given region—where projects are more likely to contribute to the development of sustainable industry clusters.
The State should establish standardized metrics for regional performance and require project-level reporting on progress, employment, and spending.
To mitigate this, the REDCs’ project scores should count as a greater proportion of the total assessment.
Key Data
$6.2 billion
— Total State grants, tax credits, and other funding allocated to businesses and localities since the REDCs' 2011 inception.
$4.4 billion
— Total State spending on economic development in 2018.
$2.5 billion
— Total State economic development-related tax expenditures in 2018.
$1.8 billion
— Total State economic development direct spending in 2018.
$763 million
— Funding received by projects through the CFA process in 2018.
$100 million
— Funding received through the DRI in 2018.
New York's economic development landscape is fragmented, with over 100 Industrial Development Agencies and nearly 300 Local Development Corporations operating with minimal accountability and inconsistent reporting. These entities manage billions in taxpayer funds and debt, yet often fail to produce significant job growth, necessitating consolidation and stricter oversight to ensure public resources are used effectively.
Recommendations related to Economic Development Transparency
The State should consolidate local Industrial Development Agencies into regional entities to improve coordination and efficiency.
The State should prohibit Local Development Corporations from engaging in economic development activities to reduce duplication of efforts.
The State should improve reporting requirements to ensure data on projects is consistent, accurate, and timely.
The State should allow the Office of the State Comptroller to audit Local Development Corporations to ensure appropriate internal controls and safeguard public funds.
The State should increase resources for the Authorities Budget Office to enable it to conduct its full scope of work, including proper review of reports.
Key Data
$10 billion
— Total amount allocated to economic development by state and local governments in 2018.
$29 billion
— Combined debt outstanding for Local Development Corporations and Industrial Development Agencies at the end of 2017.
$272 million
— Amount in grants provided by Local Development Corporations in 2017 to economic development projects that planned zero new jobs.
$700 million
— Total tax benefits provided by Industrial Development Agencies in 2017.
$100 million
— Amount spent on staff wages, salaries, and benefits by Industrial Development Agencies and Local Development Corporations in 2015.
$2 million
— The current budget of the Authorities Budget Office, which is approximately 40 percent of what was envisioned.
The Opportunity Zone program, intended to spur investment in low-income areas, risks significant revenue loss for New York State and City while lacking necessary oversight and accountability. New York should consider increasing transparency requirements for funds or decoupling from the federal program to ensure public benefits and fiscal responsibility.
Recommendations related to Economic Development Transparency
The State can require Opportunity Funds operating in New York State to report on their activity in order to qualify for state tax benefits.
The State could require funds to report annually on the value of gains invested by New York State taxpayers in qualified opportunity funds.
The legislature could pass a bill that would limit benefits to residential projects that meet a minimum affordability threshold for a fixed set of time or to commercial projects that are consistent with an REDC strategic plan.
The State could limit benefits to zones that meet both the poverty and family income thresholds, or to those that meet the criteria based on the most recently available Census data.
New York State could decouple fully from the federal program.
Key Data
$2 billion
— Estimated annual cost of the Opportunity Zone program to the federal government.
$63 million
— Estimated annual fiscal impact of the Opportunity Zone program on New York State.
$31 million
— Estimated annual fiscal impact of the Opportunity Zone program on New York City.
$6 trillion
— Estimated amount of unrealized capital gains held by taxpayers nationally.
$53 billion
— Amount that funds intend to raise to invest in Opportunity Zone projects as of August 2019.
$9.4 billion
— Total cost of the Opportunity Zone program for federal tax years 2018 to 2022.
The NYC Ferry system operates with high subsidies, costing $10.73 per ride in fiscal year 2018, while its funding through the Economic Development Corporation limits public oversight and transparency compared to traditional city budget processes. To improve efficiency, officials should consider implementing dynamic pricing, adjusting fares for leisure travelers, and reevaluating expansion plans that require significant additional capital and operating expenditures.
Recommendations related to Economic Development Transparency
City officials should reconsider the policy choices that contribute to the high subsidies, evaluate options that would reduce the level of subsidy, and consider whether alternative uses would meet the city’s transportation needs more efficiently and more effectively.
EDC and City officials should charge higher fares on weekends and for noncommuters to offset the cost of subsidies for daily commuters.
Dynamic pricing models could be more appropriate for long, low-productivity routes that require substantial subsidies and see demand spikes on weekends.
A different fare structure could also mitigate the need to charter vessels or purchase larger boats.
Reviewing the system’s costs and subsidies should prompt consideration of whether maintaining the same operating strategy, pricing model, and expansion plans will be the most efficient and most effective use of City transportation funding.
Key Data
$10.73
— The per-ride operating subsidy for the NYC Ferry in fiscal year 2018.
$24.75
— The projected per-ride subsidy for the proposed Coney Island route.
$56.7 million
— The operating costs for the NYC Ferry in fiscal year 2018.
22%
— The farebox operating ratio for the NYC Ferry in 2018, indicating the share of operating costs covered by fare revenue.
$638.5 million
— The total capital commitments for the NYC Ferry as of February 2019.
$39.4 million
— The amount of revenue retained by the Economic Development Corporation in fiscal year 2018 to subsidize the ferry system.
New York State's economic development programs are often costly and poorly designed, with limited transparency that hinders effective evaluation of project-level results. To improve outcomes, the state should implement standardized metrics, publish a comprehensive database of deals, and reorient regional councils to focus on strategic, data-driven investments.
Recommendations related to Economic Development Transparency
The state should capture fully and report together all state and local incentives to improve transparency.
Policymakers should standardize metrics across initiatives to allow for better evaluation of economic development programs.
The state should publish a database of deals to increase transparency and accountability.
The state should implement regular evaluation of economic development programs to ensure effectiveness.
The state should make administrative reforms to improve the procurement process for economic development projects.
Regional Economic Development Councils should set clear goals and criteria for evaluating success to improve consistency and quality of project reporting.
Key Data
$570 million
— Savings from eliminating film and production tax credits.
$570 million
— Savings from reducing ESD discretionary capital spending by half.
$1.1 billion
— Total available for reinvestment from eliminating ineffective expenditures.
$750 million
— Annual awards to regional projects based on political priorities.
$382,077
— Average economic development project award.
New York spent $9.9 billion on state and local economic development in 2018, yet transparency remains insufficient despite calls for a "database of deals" and a unified budget. Reforms are needed to standardize metrics and ensure that economic development benefits are tied to private sector investment and regular performance evaluations.
Recommendations related to Economic Development Transparency
The state should codify the gubernatorial proposal for a “database of deals” and procurement reform into law to ensure transparency.
New York must establish a forward-looking unified economic development budget that includes information on the costs of all economic development programs for the coming fiscal year.
The state should implement standardized metrics across programs to allow for the comparability of results.
Policymakers should enact program design improvements so that benefits follow private sector investment, eligibility is standardized, and results are evaluated regularly.
Key Data
$9.9 billion
— Total amount spent on state and local economic development efforts in 2018.
$5.6 billion
— Total amount of local economic development costs in 2018.
$4.4 billion
— Total amount of state economic development costs in 2018.
63%
— Growth in spending by the Empire State Development Corporation from 2016 to 2018.
New York State has allocated over $28 billion to economic development initiatives with lackluster results, prompting calls for greater accountability and oversight. To ensure long-term transparency, the state should codify reporting requirements into law and implement a unified budget with standardized metrics for all economic development programs.
Recommendations related to Economic Development Transparency
The new reporting and restored oversight should be established by statute to ensure that both continue under future administrations and that needed data are reported.
Additional reforms to program design and transparency are necessary to ensure accountability to taxpayers, including a unified economic development budget, standardized metrics, and improved program design.
Key Data
$28 Billion
— Total amount allocated to economic development since the beginning of the Cuomo administration.
New York state officials have failed to enact significant reforms to address corruption in economic development contracts, despite campaign promises to increase transparency. Legislative leaders and the Governor are urged to pass measures including a public database of business subsidies and restrictions on campaign contributions from state vendors to mitigate ongoing corruption risks.
Recommendations related to Economic Development Transparency
Governor Cuomo should honor his campaign commitments and act on clean contracting, a database of deals, and limits on campaign contributions by potential vendors.
The Governor and legislative leaders should act on clean contracting.
Speaker Heastie and Senate Majority Leader Stewart-Cousins should pass legislation to reform the state’s contracting if a three-way agreement cannot be reached.
The legislature should pass the Comptroller’s Procurement Integrity Act to review contracts before they are executed for state-affiliated nonprofits.
The legislature should pass the Database of Deals to list all business subsidies received by companies.
Key Data
$1B
— Amount of state economic contracts rigged by top aides and campaign contributors to the Governor.
The incentive package for Amazon's HQ2 in Long Island City provides up to $2.8 billion in state and city benefits for 25,000 jobs, potentially rising to $3.5 billion if 40,000 jobs are created. This deal highlights concerns regarding the use of discretionary capital grants that circumvent legislative oversight and the need to reevaluate as-of-right tax incentives that may no longer be necessary.
Recommendations related to Economic Development Transparency
The State Legislature should utilize the requirement to increase the Excelsior program cap as an important opportunity for oversight and review of the incentive package.
The State should implement caps to the level of wages eligible for reimbursement to minimize financial exposure.
State capital funding should be invested in general infrastructure rather than for the direct benefit of an individual company.
Amazon should pay the full value of the PILOT directly to the City rather than diverting funds to the surrounding neighborhood.
New York City’s as-of-right tax incentives, such as REAP and ICAP, should be evaluated and potentially narrowed or eliminated to ensure benefits are only spent to induce job creation that would not otherwise occur.
Key Data
$3.5 billion
— Total benefits available to Amazon from New York State and City if 40,000 jobs are created.
$1.2 billion
— Maximum Excelsior tax credits Amazon could receive over the 2019-2028 period.
$505 million
— Maximum value of the Empire State Development capital grant.
$386 million
— Estimated total of the Industrial and Commercial Abatement Program (ICAP) property tax abatement.
$1.44 billion
— Potential total Relocation and Employment Assistance Program (REAP) credit if 40,000 jobs are created.
$180 million
— Capital funding announced for improvements to sewer and water systems, schools, and street reconstruction.
Watch the original segment here . There's an ongoing debate over the state's use of taxpayer money for economic development efforts, but a lot of investment happens at the local level, through Industrial Development Agencies. And those are subject to oversight from the state's Authorities Budget Office- but there's still…
New York State's economic development landscape involves over 100 Industrial Development Agencies and 200 local development corporations that distribute over $750 million in annual benefits, yet these entities lack sufficient oversight and transparency. Systematic, thorough reporting and consolidation of these agencies are necessary to ensure public funds are managed effectively and held accountable.
Recommendations related to Economic Development Transparency
The state should further consolidate economic development because there are more than 100 IDAs and close to 200 local development corporations across the state.
The state must strengthen ABO enforcement powers because the Authorities Budget Office is currently unable to suspend an IDA’s operations for noncompliance.
The state should expand ABO resources to allow for more thorough analysis of IDA and LDC inputs into the Public Authority Reporting Information System.
The state should authorize the State Comptroller to audit LDCs to improve oversight.
The state should expand the proposed reporting requirements to LDCs to ensure transparency.
The state should expand reporting requirements to State entities engaged in economic development.
Key Data
$750 million
— As of 2015, Industrial Development Agencies provided more than $750 million in benefits, the vast majority of which were through tax reductions.
100
— There are more than 100 Industrial Development Agencies across New York State.
200
— There are close to 200 local development corporations across New York State.
$8 billion
— State and local governments allocate more than $8 billion per year toward economic development.
New York's economic development landscape is cluttered with numerous legislative proposals that often lack rigorous fiscal oversight or clear economic benefits. The state should reject specific economic development bills that threaten fiscal stability and fail to provide transparent returns on investment.
Recommendations related to Economic Development Transparency
The Governor should reject ten economic development bills that lack sufficient oversight or fiscal justification.
Key Data
$440 million
— Proposed increase in total funding for the Excelsior Linked Deposit Program.
$200 million
— Proposed dedication of Excelsior Linked Deposit Program funds for business startups.
$140 million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$100 million
— Annual cap for the new tax credit for music and video game production costs.
$65 million
— Proposed increase for the Excelsior Linked Deposit Program.
$25 million
— Annual cap for the new tax credit for video game production.
This scorecard tracks New York State legislative proposals concerning economic development, providing details on bill sponsors, status, and projected fiscal impacts for various programs. The initiatives cover a wide range of support mechanisms, including tax credits for manufacturers, grants for small business incubators, and funding for microbusiness development.
Key Data
$440 Million
— Total funding increase for the Excelsior Linked Deposit Program.
$200 Million
— Funding dedicated to business startups within the Excelsior Linked Deposit Program.
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$20 Million
— Funding provided for microbusiness hiring under the HIRE NY act.
$10 Million
— Fiscal impact associated with the GrowNY pilot program.
$2 Million
— Fiscal impact of the Transitional Green Development Program.
New York State continues to allocate billions of dollars annually toward economic development programs despite a lack of transparent data and evidence that these investments produce significant job growth. Reforms are necessary to establish a unified budget, standardize performance metrics, and create a comprehensive database of deals to ensure taxpayer funds are used effectively.
Recommendations related to Economic Development Transparency
Publish a “database of deals” that includes funds committed and disbursed to each recipient across all programs, as well as project progress and results.
Use a unified economic development budget, reflecting the full scope of costs including tax expenditures, agency and authority spending, and the value of discounted power, to plan for future years.
Standardize metrics across economic development programs, so that results can be compared.
Improve program design so that benefits are provided retroactively based on performance, not up front; eligibility is standardized rather than discretionary; and results are regularly evaluated.
Make administrative reforms to ensure transparent, competitive procurement and stronger oversight.
Key Data
$4 billion
— Total spent on economic development programs in fiscal year 2016.
$2.4 billion
— Amount of tax breaks included in the fiscal year 2016 economic development spending.
$1.7 billion
— New appropriations for economic development contained in the fiscal year 2019 budget.
5 percent
— Total job growth outside of New York City between 2010 and 2016.
11 percent
— National job growth rate between 2010 and 2016.
20 percent
— Percentage of business location decisions where average-sized tax incentives are the deciding factor.
The New York State Fiscal Year 2019 Budget increases economic development spending by at least $600 Million without implementing a 'database of deals' or other measures to ensure transparency, accountability, or efficacy. This lack of oversight continues a pattern of investing in economic development without the necessary mechanisms to track and evaluate the impact of these expenditures.
Recommendations related to Economic Development Transparency
The State should implement a 'database of deals' or other actions to improve the transparency, accountability, or efficacy of economic development investments.
Key Data
$600 Million
— The minimum growth in economic development spending in the FY2019 budget without improved transparency or accountability measures.
New York State's economic development spending has expanded significantly, reaching $4.0 billion in fiscal year 2016, yet lacks sufficient transparency and documented results. To address this, the state should implement a moratorium on new projects and adopt reforms such as a consolidated budget and universal reporting requirements.
Recommendations related to Economic Development Transparency
The state should reject new economic development proposals and impose a moratorium on new economic development projects until more transparency and documentation of results are achieved for existing programs.
Necessary reforms for economic development spending include the creation of a consolidated economic development budget, universal reporting requirements, improved program design, and administrative reforms.
Key Data
$4.0 billion
— Amount New York State spent on economic development in fiscal year 2016.
$338 million
— Increase in Empire State Development (ESD) capital spending proposed in the Executive Budget.
$1.9 billion
— Proposed Empire State Development (ESD) capital spending level.
$234 million
— Previous non-ESD economic development capital spending level.
$633 million
— Proposed non-ESD economic development capital spending level.
$600 million
— Proposed funding for a new Life Sciences Laboratory.
New York City's economic development efforts cost $3.2 billion annually, yet the current system for awarding discretionary tax benefits lacks sufficient transparency and standardized goals. To improve outcomes, the city should implement clearer standards for tax expenditures, enhance reporting on all economic development projects, and prioritize infrastructure investments in underdeveloped neighborhoods.
Recommendations related to Economic Development Transparency
Establish more detailed standards for awarding discretionary tax expenditures.
Improve transparency and reporting on EDC projects.
Make capital investments in infrastructure to support job growth in underdeveloped neighborhoods.
Use conduit financing to support growth in the arts, health, and educational sectors.
Key Data
$548 million
— The value of discretionary tax benefits awarded by the City in 2016.
22
— The number of projects awarded discretionary tax benefits in fiscal years 2015 and 2016.
$30,000
— The threshold below which most projects received benefits per job created.
$100,000
— The amount of benefits per job received by three specific projects.
87 percent
— The portion of conduit debt issued since 2016 that went to the cultural, educational, and health sectors.
30 percent
— The portion of conduit debt recipients since 2016 located in Brooklyn.
The Authorities Budget Office requires increased funding to $3.105 million to effectively oversee 578 state and local authorities that manage $51 billion in annual spending and $270 billion in public debt. This funding increase is necessary to address staffing shortages and enable the agency to fulfill its critical role in ensuring accountability and transparency for public authorities.
Recommendations related to Economic Development Transparency
The state should increase funding for the Authorities Budget Office to $3.105 million to allow it to adequately fulfill its statutory duties.
The Authorities Budget Office should fill vacant positions including counsel, policy analysts, communications, and administrative roles to reach the staffing levels envisioned when it was reestablished.
The Authorities Budget Office should modernize the Public Authorities Reporting and Information System (PARIS) database to ensure the accuracy of reported state authority data.
The Authorities Budget Office should conduct more investigations and reviews of public authorities to ensure compliance with procurement guidelines and ethics laws.
The Authorities Budget Office should monitor authorities’ compliance with the Freedom of Information and Open Meetings Laws and ethics guidelines.
Key Data
$3.105 million
— Proposed annual funding allocation for the Authorities Budget Office.
$1.169 million
— The amount of the funding increase over the current allocation in the Executive Budget.
578
— Number of state and local authorities overseen by the Authorities Budget Office.
$51 billion
— Total annual spending by the state and local authorities overseen by the office.
$270 billion
— Total public debt held by the state and local authorities overseen by the office.
40 percent
— Current staffing level of the Authorities Budget Office compared to the level envisioned in 2010.
New York State's economic development and business subsidy programs are currently at high risk for corruption and waste, prompting calls to freeze over $3.2 billion in new proposed spending until major transparency reforms are enacted. Proposed reforms include requiring competitive contracting, centralizing grant awards under the Empire State Development Authority, and creating a public database of all business subsidies.
Recommendations related to Economic Development Transparency
The state should require competitive and transparent contracting for the award of state funds, including those distributed by authorities and affiliates.
The Empire State Development Authority should award all state economic development grants and contracts, rather than using SUNY or state-controlled non-profits.
The state should empower the Comptroller to pre-approve all SUNY and OGS central contracts over $250k.
The state should prohibit all state-affiliated entities from doing business with their boards of directors to prevent conflicts of interest.
The state should create a Database of Deals that shows the total value of subsidies awarded to a business, including job targets and “clawback” provisions.
The state should limit campaign contributions from anyone seeking a state contract to reduce potential conflicts of interest.
Key Data
$1 Billion
— The amount of state economic development contracts involved in federal trials centered on alleged rigging.
$3.2 billion
— The amount of new proposed spending in the Executive Budget on economic development and business subsidies that watchdog groups are calling to freeze.
$250k
— The contract value threshold above which the Comptroller should be empowered to pre-approve SUNY and OGS central contracts.
19
— The number of states and NYC that have laws limiting campaign contributions from anyone seeking a state contract.
New York allocates over $4 billion annually to economic development projects that often lack transparency, unified budgeting, and clear performance metrics, resulting in significant taxpayer costs for projects that fail to meet job creation goals. Implementing standardized reporting, a unified budget, and pay-for-performance requirements would ensure greater accountability and better returns on state investments.
Recommendations related to Economic Development Transparency
The state should establish a unified economic development budget to provide a clear overview of spending.
New York must standardize metrics across all economic development initiatives to allow for accurate comparisons.
The state should establish a database of deals that outlines every economic development incentive provided.
New York should improve program design so that incentives are only provided after an employer has fulfilled its promises.
The state must adopt administrative reforms to ensure procurement integrity.
Key Data
$4 billion
— Annual allocation by New York state to economic development, including tax benefits.
$1 billion
— Amount of taxpayer money allocated to 'silver-bullet' projects before a single new job was created.
$337,931
— Cost per job for the state to equip a factory for a new tenant in DeWitt.
$83 million
— Investment made by the state in a factory for an LED light company that failed to materialize.
$15 million
— Additional cost to taxpayers to properly equip a building for a new tenant after the initial project failed.
290 jobs
— Number of jobs promised by the new company replacing the failed LED light company.
New York City's economic development programs, which cost $3.2 billion in 2016, require greater transparency and more rigorous standards to ensure that tax incentives and capital investments effectively drive job growth. The city must improve its evaluation of discretionary tax benefits and ensure that conduit financing is targeted toward industries that stimulate economic activity rather than just private institutions.
Recommendations related to Economic Development Transparency
Make as-of-right tax expenditures more cost-effective with continued reform.
Create more detailed standards for awarding discretionary tax expenditures.
Manage EDC programs with a focus on job creation and improving transparency.
The Independent Budget Office should evaluate tax expenditure programs for cost-effectiveness.
The City should require reporting that covers the full scope of project benefits.
Key Data
$3.2 billion
— The annual cost of the City’s economic development efforts in 2016.
3.6 percent
— The portion of recipient projects that relied on the ICAP abatement to reach a hurdle rate that made the investment worthwhile.
$1,758 to $590,269
— The wide range of per-job subsidy amounts for projects granted discretionary benefits in fiscal years 2015 and 2016.
90 percent
— The share of conduit debt issued to educational, arts, and health sectors since 2014.
New York State faces significant budget gaps and must address potential federal policy changes while managing existing fiscal commitments. To improve fiscal oversight, the state should implement reforms to economic development programs, specifically by ending project-specific appropriations and establishing a comprehensive database of all economic development deals.
Recommendations related to Economic Development Transparency
The state should implement economic development reforms, including an end to project specific appropriations, to improve fiscal accountability.
The state should create a "database of deals" to increase transparency regarding economic development projects.
New York State currently spends $5 billion annually on economic development programs, yet new initiatives should not be approved until comprehensive reforms regarding evaluation, procurement, and disclosure are implemented. Expanding targeted tax credits, such as the Film Tax Credit Program which grew from a $25 million cap to a $420 million annual cost, demonstrates the need to curtail narrowly focused incentives that lack proven returns on investment.
Recommendations related to Economic Development Transparency
The Governor should veto the three bills that would expand the State’s economic development programs.
Any new spending or tax programs should be considered in the context of an overall budget and financial plan.
No new programs should be approved until reforms are put in place to improve evaluation, procurement, and disclosure requirements.
Existing spending must be effectively evaluated.
Narrowly focused economic development incentives should be curtailed.
Key Data
$5 billion
— Annual state spending on economic development programs.
$100,000
— Maximum grant amount for small businesses supporting commercialization of innovative energy and environmental technology under A6110/S1120.
$5 million
— Annual cap for the proposed refundable tax credit for companies that hire female and minority writers and directors under A7270-c/S4999-d.
$25 million
— Original annual cap for the Film Tax Credit Program when it was first adopted.
$420 million
— Current annual cost of the Film Tax Credit Program.
New York State should implement a unified economic development budget and a comprehensive database of deals to improve transparency and accountability for the $4 billion spent annually on economic development. Additionally, the state needs to standardize performance metrics across all initiatives and ensure that subsidies are only provided after private entities have made their own investments.
Recommendations related to Economic Development Transparency
The State should establish a unified economic development budget to list and quantify all spending, including tax expenditures and subsidies.
New York should use standardized metrics across economic development initiatives to ensure comparability regarding job creation, retention, and capital investments.
The State should establish a 'Database of Deals' to bring together all state funds disbursed or committed for economic development along with results.
Project-specific economic development subsidies should only be provided after a private entity has made an investment to reduce taxpayer risk.
The Office of the State Comptroller should have authority to review and approve all contracts more than $250,000 to improve administrative oversight.
Economic development programs should have clear eligibility and programmatic parameters to ensure accountability.
State authorities, state corporations, and state nonprofits should not be allowed to do business with members of their boards.
Key Data
$4 billion
— Total amount the state invests in economic development programs each year.
$1.4 billion
— Amount in the fiscal year 2017-2018 budget allocated to programs that lack clear parameters.
$250,000
— Threshold above which the State Comptroller should have the authority to review and approve contracts.
$14 million
— Annual appropriation for Centers for Advanced Technology.
$11 million
— Annual appropriation for Centers of Excellence.
$10 million
— Annual appropriation for the Manufacturing Extension Partnership.
The data points are 348 and 74. 348 is the number of Local Development Corporations and Industrial Development Agencies in NYS. These corporations made $16.2 billion in economic development investments from 2011 through 2015, yet only 5 of the state's 62 counties have had job growth higher than the national…
Business Improvement Districts (BIDs) in New York City, which collect over $100 million in annual assessment fees, require more rigorous public oversight and transparent performance evaluation during their contract renewal process. The City should mandate that contract renewals be conditioned upon a thorough review of performance metrics and strategic plan progress, while also ensuring that new BIDs possess sufficient size and resources to operate efficiently.
Recommendations related to Economic Development Transparency
The current contract should be revised to specify that BID contract renewal is conditioned upon a thorough performance review and analysis of progress in implementing the BID's strategic plan and should include specific evaluation criteria and performance metrics to be utilized by SBS.
The contract should also require BIDs to survey their members at least once every five years to determine satisfaction with the BID's strategic plan and performance.
Elected officials, property owners, and business owners should be given the opportunity to comment during this periodic review process.
The additional performance measurement data, combined with the data SBS already collects, should be included in the annual BID Report for every BID for which a contract is renewed in that year.
SBS should also disclose any written notices of violations it has issued to BIDs, as well as the actions taken by BIDs to correct these concerns.
The City Council should hold oversight hearings at least once each year to review the SBS’s oversight of BIDs with contracts up for renewal.
Key Data
$100 million
— Total BID assessment revenues collected in fiscal year 2016.
74
— Number of Business Improvement Districts in New York City as of August 2017.
$134 million
— Total revenue collected by BIDs from all sources in fiscal year 2016.
$838
— Median BID assessment fee in fiscal year 2016.
0.13 percent
— Average BID charge as a share of a building's market value.
17 percent
— Share of BID expenditures for general and administrative expenses in fiscal year 2016.
New York State's system of Industrial Development Agencies and Local Development Corporations is fragmented and lacks sufficient accountability, with nearly 350 entities making $16.2 billion in investments from 2011 to 2015. These entities often fail to justify their investment choices, necessitating reforms to consolidate operations and standardize reporting to ensure public resources are used effectively.
Recommendations related to Economic Development Transparency
IDAs in each of the state’s 10 REDC regions should be consolidated into a single multicounty IDA per region, which will work to support the REDCs’ strategic plans.
Existing LDCs should not be allowed to engage in economic development activities and should be limited to specific purposes.
The formation of new LDCs within each region should be subject to a veto by the local REDC so that economic development within the region remains coordinated.
ABO should be granted the ability to assess fines, suspend directors, or to curtail certain activities of an authority and its board which have been censured but remain out of compliance with state law or deficient in performing their fiduciary duty.
Oversight of the data being input into PARIS should be increased.
OSC’s audit authority should be extended to apply to LDCs directly, not only through their relationships with local governments.
IDAs and LDCs should collect the same information for each of their projects, all of which should be available on the state’s open data website.
Key Data
$16.2 billion
— Total investments made by Industrial Development Agencies and Local Development Corporations from 2011 through 2015.
350
— Number of Industrial Development Agencies and Local Development Corporations operating across New York State in 2015.
$1.9 billion
— Total spending and tax expenditures by Industrial Development Agencies and Local Development Corporations in 2015.
$100 million
— Amount spent by Industrial Development Agencies and Local Development Corporations on wages, salaries, and benefits in 2015.
$24 billion
— Total debt outstanding held by Industrial Development Agencies and Local Development Corporations.
55.7%
— Share of Industrial Development Agency procurement costs that were for non-competitively bid contracts during the 2016 reporting year.
This week's data point is $780 million - the value of contracts involved in the alleged bid-rigging and corruption scandal involving State economic development programs. Special guest New York State Comptroller Tom Dinapoli discusses his proposal for independent review and reform of state procurement practices with Ben Max and Maria…
New York State's spending on economic development programs has tripled under the current administration, yet these investments lack clear performance metrics and transparency, making it difficult to evaluate their effectiveness. To address this, a comprehensive reform blueprint is needed to standardize metrics, consolidate budgets, and create a public database of all economic development deals.
Recommendations related to Economic Development Transparency
New York State should establish a unified economic development budget to provide a clear overview of all spending.
The state must use standardized metrics to properly evaluate the effectiveness of economic development investments.
Officials should publish a database of deals to ensure transparency regarding how public funds are allocated.
The state needs to improve program design to ensure that economic development initiatives are actually achieving their intended goals.
New York should make administrative reforms to streamline oversight and improve the management of economic development programs.
Key Data
23%
— Growth in total appropriations to Empire State Development from the 2017 adopted budget to the 2018 adopted budget.
$1.4 billion
— Amount of appropriated funds for Empire State Development dedicated to projects without specific guidelines.
$420 million
— Annual cost of the Empire State Film Production Tax Credit.
$163 million
— Annual cost of the Excelsior Scholarship once fully phased in.
9 out of 10
— Number of regions in New York State that lagged behind national job growth from 2010 to 2016.
New York’s economic development tax incentive programs are the most expensive in the nation, costing $8.25 billion in 2015, yet there is little evidence that these subsidies effectively drive economic growth or job creation. To address this, reforms are needed to establish a unified budget, implement standardized performance metrics, and increase transparency regarding the recipients of these costly incentives.
Recommendations related to Economic Development Transparency
The State should implement a moratorium on new economic development spending until it increases transparency, establishes performance criteria to measure impacts, and enforces agreements to hold beneficiaries accountable.
New York should establish a unified economic development budget that captures both state and local costs.
The State should use standardized metrics across all economic development initiatives to ensure consistency.
New York should publish a database of deals to shine a light on the specific recipients of tax incentives.
The State should improve program design to follow best practices and reward actual performance.
New York should make administrative reforms to procurement and oversight rules to improve accountability.
Key Data
$45 billion
— The estimated cost of state and local economic development tax incentives to taxpayers in 2015.
$8.25 billion
— The amount New York awarded in economic development incentives in 2015.
2.5 times
— The factor by which New York's incentive use is higher than the national average.
32
— The number of states, including 47 cities and the District of Columbia, included in the database of tax expenditures.
New York State is operating under an emergency budget that extends spending levels through May 31, 2017, while including $2.5 billion for water infrastructure. This situation highlights the need for a more effective budget process that prioritizes fiscal discipline and greater transparency in economic development spending.
Recommendations related to Economic Development Transparency
The Legislature and Governor should promptly come to an agreement that includes improved targeting and disclosure of economic development spending.
CBC's Director of State Studies David Friedfel and Ron Deutsch of the Fiscal Policy Institute join Nick Reisman on Capital Tonight to discuss economic development in New York and reforms that should be part of the budget process.
New York should implement comprehensive procurement reforms to ensure competitive, transparent contracting and consolidate economic development awards under the Empire State Development Corporation. Establishing a public 'Database of Deals' and empowering the comptroller to review contracts over $250,000 would significantly increase accountability and reduce conflicts of interest in state spending.
Recommendations related to Economic Development Transparency
Require competitive and transparent contracting for the award of state funds by all state agencies, authorities, and affiliates.
Transfer responsibility for awarding all economic development awards to the Empire State Development Corporation (ESDC), and end awards by state non-profits and SUNY.
Empower the comptroller to review and approve all state contracts over $250k.
Prohibit state authorities, state corporations, and state non-profits from doing business with their board members.
Create a ‘Database of Deals’ that allows the public to see the total value of all forms of subsidies awarded to a business.
Limit campaign contributions from anyone who has or is seeking a state contract.
Key Data
$250k
— The threshold for state contracts that the comptroller should be empowered to review and approve.
six
— The number of states that have already created a 'Database of Deals' to track subsidies awarded to businesses.
six months
— The duration after a contract ends during which vendors should be prohibited from making campaign contributions.
Economic development programs should be required to disclose comprehensive data, including project identification, incentive details, and job creation commitments, to ensure public accountability. Standardizing these metrics across all programs allows for better tracking of actual versus committed jobs and capital investments over time.
Recommendations related to Economic Development Transparency
Agencies should report general project information, including the project identification number, applicant name, site address, industry code, incentive type, and the year the incentive began.
Programs must disclose incentives issued with annual breakouts, such as grants paid, loans issued and balances, tax credits awarded, and the estimated value of other benefits like discounted power or rent.
Entities should track and report job creation and retention commitments, including full-time equivalent and temporary jobs, alongside actual job numbers reported annually after the incentive begins.
Programs should document capital investment commitments and actual qualified investments, including both total and annual figures, to measure the economic impact of the incentives.
New York should reject proposed increases in economic development spending, including $800 million in new allocations, until greater transparency and measurable results are achieved. A moratorium on new programs is necessary, alongside the implementation of a consolidated budget and universal reporting requirements to ensure accountability for taxpayer funds.
Recommendations related to Economic Development Transparency
The state should reject the $800 million allocation for economic development, as well as other proposed economic development spending.
Legislators should impose a moratorium on new economic development programs until more transparency and results are achieved in existing initiatives.
The state should create a consolidated economic development budget to improve oversight and accountability.
The state should implement universal reporting requirements for all economic development programs to ensure efficacy.
New York should repeal or substantially decrease the film tax credit, which costs taxpayers $420 million annually despite questionable efficacy.
Key Data
$800 million
— The amount allocated for economic development that should be rejected.
$319 million
— The proposed increase in spending by Empire State Development.
$334 million
— The proposed increase in non-ESD economic development capital spending.
$650 million
— The total amount of non-ESD economic development capital spending proposed.
$420 million
— The annual cost to state taxpayers for the Empire State Film Tax Credit.
New York State's economic development spending reached $4.0 billion in fiscal year 2016, yet many programs lack standardized metrics and transparent reporting to demonstrate their effectiveness. To improve accountability, the state should consolidate its economic development budget and create a publicly accessible, searchable database of all incentives.
Recommendations related to Economic Development Transparency
The growth of economic development costs should be halted, not accelerated, until the effectiveness of each program is demonstrated through standardized performance measures and transparent reporting.
New York State should implement a consolidated economic development budget that incorporates state agency spending, tax incentives, and public authority benefits to improve transparency and accountability.
New York State should create a publicly accessible, searchable database of economic development incentives.
Key Data
$4.0 billion
— Total state economic development costs in fiscal year 2016.
$2.4 billion
— State tax breaks in fiscal year 2016, representing 60 percent of total costs.
$1.6 billion
— Direct state spending in fiscal year 2016, representing 40 percent of total costs.
$1.7 billion
— Proposed Empire State Development spending in the Executive Budget.
$650 million
— Non-ESD capital spending for economic development in fiscal year 2018.
$1.5 billion
— Cumulative future tax credits proposed in the Executive Budget.
The FY2018 Executive Budget allocates significant capital funding to questionable economic development projects, including $300 million for a life science initiative and $400 million for Buffalo-based projects. Furthermore, changes to the START-UP NY program weaken reporting requirements and eliminate clawback provisions, hindering the ability to evaluate program success and recoup state investments.
Recommendations related to Economic Development Transparency
The state should avoid budget gimmicks, such as shifting operating expenses to the capital budget, to ensure transparency in state spending.
The state should maintain clawback provisions and rigorous reporting requirements to ensure accountability for economic development investments.
The state should cease allocating capital funding to dubious economic development projects and instead prioritize fiscal responsibility.
Key Data
$300 million
— Capital funding allocated to a Life Science initiative.
$400 million
— Capital funding allocated for projects in Buffalo.
$108 million
— Capital funding allocated for an ice-skating rink in the Bronx.
$150 million
— Capital funding spread throughout the state through the Regional Economic Development Councils.
15 percent
— Increase in appropriations for economic development projects in the operating budget.
The state's reliance on non-profits and the SUNY system to award economic development contracts has created a system prone to corruption, as evidenced by a massive bid-rigging scandal involving over $1 billion in public funds. To restore public trust, reforms are needed to mandate competitive contracting, empower the Comptroller to oversee agreements, and establish a public database of all business subsidies.
Recommendations related to Economic Development Transparency
Require competitive and transparent contracting for the award of state funds -- regardless of the contracting entity.
Transfer responsibility for awarding all business subsidy awards to the Empire State Development Corporation, and end the use of state non-profits and SUNY in awarding these subsidies.
Empower the Comptroller to review and approve all state contracts.
Create a Database of Deals that allows the public to see the total value of all forms of subsidies awarded to a business.
Seek to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone who has or is seeking a state contract.
Key Data
$750 million
— The scale of the bid-rigging scandal involving state-controlled non-profits and SUNY Polytechnic.
$1 billion
— The amount of public funds affected by the scandal involving systemic problems in how the state awards large contracts.
six
— The number of states that currently maintain a Database of Deals to allow public visibility into business subsidies.
Nineteen
— The number of states and New York City that have implemented 'pay to play' laws to limit campaign contributions from contractors.
New York state spends $8.6 billion annually on economic development initiatives without a unified budget or clear metrics to measure project impacts and accountability. The state should halt project-specific appropriations until it establishes rigorous eligibility criteria and performance-based subsidy requirements to ensure taxpayer funds are protected.
Recommendations related to Economic Development Transparency
The state should implement more robust reporting requirements for all economic development initiatives.
The state should stop project-specific appropriations for economic development until eligibility criteria are established and accountability mechanisms are enhanced.
The state should pay for performance, providing subsidies only for investments and wages that have been expended.
Key Data
$8.6 billion
— Total annual state economic development investments.
$4 billion
— The state portion of annual economic development investments.
$4.6 billion
— The local portion of annual economic development investments.
$750 million
— The amount the state is paying to build the SolarCity factory.
$486 million
— The appropriation for the SolarCity plant in Buffalo.
$638 million
— The appropriation for the Nano Utica project.
Following a major bid-rigging scandal involving over $1 billion in public funds, watchdog groups are calling for fundamental reforms to New York's economic development contracting processes. Proposed changes include mandating competitive bidding, centralizing subsidy awards under the Empire State Development Corporation, and increasing oversight through the Comptroller and a public database of deals.
Recommendations related to Economic Development Transparency
The state should require competitive and transparent contracting for the award of state funds, regardless of the contracting entity.
The state should transfer responsibility for awarding all business subsidy awards to the Empire State Development Corporation (ESDC) and end the use of state non-profits and SUNY in awarding these subsidies.
The state should empower the Comptroller to review and approve all state contracts.
The state should create a Database of Deals that allows the public to see the total value of all forms of subsidies awarded to a business.
The state should limit campaign contributions from anyone who has or is seeking a state contract to reduce the potential for conflicts of interest.
Key Data
$1 billion
— Amount of public funds affected by the scandal involving New York's Upstate economic development program.
six
— Number of states that currently have a Database of Deals to track business subsidies.
Nineteen
— Number of states and New York City that have implemented 'pay to play' laws to limit campaign contributions from contractors.
New York City's economic development tax expenditures have grown significantly, rising from $1.6 billion in 2012 to $2.1 billion in 2016. Implementing a regular, independent evaluation process for these programs is essential to ensure they meet their goals and provide value for public resources.
Recommendations related to Economic Development Transparency
Support the proposed legislation to create a regular evaluation process for economic development tax expenditures.
Establish a similar evaluation process for other tax expenditures, such as property tax abatements intended to induce construction of housing.
Use evaluation results to inform the Council’s oversight and advocacy at the State and local level when evaluation identifies changes that would improve the effectiveness and efficiency of tax expenditure programs or indicates programs are ineffective and should be terminated.
Implement more scrutiny of all tax expenditures.
Establish clearer standards for discretionary tax abatements.
Key Data
$1.6 billion
— Total economic development tax expenditures in 2012.
$2.1 billion
— Total economic development tax expenditures in 2016.
$2.8 billion
— Total tax expenditures identified by the City Council Taskforce on Economic Development Tax Expenditures Report.
New York State's economic development spending often lacks transparency and accountability, particularly regarding project-specific appropriations that bypass established criteria for investment and job creation. To improve fiscal responsibility, the state should implement stricter reporting requirements, cap excessive tax incentives, and halt ad hoc funding for specific projects until clear eligibility standards are established.
Recommendations related to Economic Development Transparency
Improved wage reporting would provide a clearer picture of who benefits from the program, specifically by requiring that total wages paid and the number of employees be reported.
The personal income tax benefit in START-UP NY should be converted into a business tax credit based on wages paid to ensure the intended beneficiary is clear.
The State should exclude music and entertainment industries from the Excelsior Jobs Program, as they do not require state assistance to be economically viable.
The jobs credit in the Excelsior program should be capped, as the current 6.85 percent of wages is too generous and subsidizes salaries that are vastly in excess of the State Median Household Income.
The State should cease project-specific appropriations for economic development at least until eligibility criteria are established and accountability mechanisms are enhanced.
Key Data
$59,000
— The approximate annual State Median Household Income.
6.85 percent
— The rate of the jobs credit in the Excelsior program.
$486 million
— Funding allocated for the SolarCity plant.
$638 million
— Funding allocated for Nano Utica.
$125 million
— Funding allocated for the Norsk Titanium plant at SUNY Polytechnic Institute in Clinton County.
$6.8 million
— Incentive payments for the Buffalo Bills.
Recent state budget proposals include significant increases in economic development spending, such as $1.5 billion for the Upstate Revitalization Initiative and $1 billion in additional funding, despite a lack of evidence that these initiatives yield worthwhile returns. A moratorium on further expansions is necessary until existing programs can be carefully evaluated and unsuccessful ones terminated to ensure fiscal responsibility and transparency.
Recommendations related to Economic Development Transparency
The state should reject the use of settlement funds to support economic development projects with unquantifiable returns on investment.
A moratorium should be declared on expansions in economic development spending until the benefits of existing programs can be examined carefully and unsuccessful programs terminated.
The goal of the Private Activity Bond Allocation Act should be to subject the use of such bonds for economic development to statewide oversight, and the PACB review should be limited to bonds for that purpose.
Key Data
$1.5 billion
— Funding allocated for the Upstate Revitalization Initiative (URI).
$1 billion
— Additional spending proposed for economic development.
$600 million
— Capital grants provided through Regional Economic Development Councils.
$200 million
— Taxpayer money allocated to build a pharmaceutical factory in Chautauqua County.
$200 million
— Total funding allocated for the losers of the Upstate Revitalization Initiative.
$22 million
— Budget funds used to subsidize a mall on Staten Island.
The FY2016-2017 Executive Budget proposes over $1 billion in new economic development capital grants, including $470 million for university initiatives and $150 million for Regional Economic Development Council funding. Despite improvements in business tax subsidy transparency, the budget lacks sufficient performance reporting for these programs, with actual job results documented for less than one-fifth of regional projects.
Key Data
$1 billion
— Total amount of new economic development capital grants proposed in the Executive Budget.
$470 million
— Funding allocated for university-related economic development initiatives.
$200 million
— Funding allocated for losers of the Upstate Revitalization Initiative.
$110 million
— New SUNY/CUNY 2020 challenge grants proposed.
$150 million
— Sixth round of Regional Economic Development Council (REDC) capital funding.
New York's Regional Economic Development Councils have failed to provide consistent, detailed reporting on project outcomes, making it difficult to evaluate the effectiveness of billions in state economic development spending. To improve accountability, the state must require standardized, project-level reporting on job creation, retention, and actual costs for all funded initiatives.
Recommendations related to Economic Development Transparency
The state should ensure that actual project-level information on total costs, jobs created, and jobs retained for all projects is collected and published annually.
Empire State Development should collect more information for its centralized CFA Data Table to allow for comparisons across year of award, industry sectors, state agencies, and project types.
The state should require reporting of job results by individual project rather than in aggregate to allow for tracking how projects are performing relative to their projections.
Key Data
$3 billion
— Total amount the State has committed to projects reviewed by Regional Economic Development Councils through 2014.
3,323
— Total number of projects that have been awarded funding since the initiative’s inception.
19%
— Share of analyzed projects that included employment results in 2014.
42%
— Share of 2012 Priority Projects that did not report completion status in their 2014 Progress Updates.
$753
— The low end of the public subsidy per job based on initial projections.
$94,000
— The high end of the public subsidy per job based on initial projections.
The Excelsior Jobs Program has proven more cost-effective than the Empire Zones program it replaced by utilizing stricter performance-based criteria and annual caps. However, recent legislative modifications that expand eligibility and loosen requirements threaten to increase costs and undermine the program's fiscal discipline.
Recommendations related to Economic Development Transparency
The state should avoid the temptation to loosen restrictions and performance requirements to entice more entrants to the Excelsior Jobs Program.
Empire State Development should remain cautious and vigilant in administering and monitoring the Excelsior Jobs Program.
Legislators should avoid additional modification to expand the Excelsior Jobs Program to prevent it from slipping back into the costly patterns of its predecessor.
Key Data
$470 million
— Excelsior allocated this amount in tax credits over the lifetime of the benefit period compared to $2 billion by Empire Zones.
$250 million
— The Excelsior program had an annual program cap peaking at this amount in 2015.
$478 million
— Empire State Development accumulated this amount in unused credits during the first four years of the program.
$1.8 billion
— The allowance for rollover credits from the program’s first four years brings the potential cost of the program to this amount by 2019.
New York spends over $8 billion annually on economic development programs, yet the 109 local Industrial Development Agencies (IDAs) lack uniform review and monitoring procedures for the $660 million in tax breaks they provide each year. Legislation S5867/A7915 aims to improve transparency and accountability by requiring standardized applications, cost-benefit analyses, and policies to recoup benefits if projects fail to meet targets.
Recommendations related to Economic Development Transparency
S5867/A7915 requires a standard application that includes a detailed description of the project and the projected costs.
Applicants would need to assert the project would not occur without financial assistance, or if the project could be completed without assistance, explain why the project is worthy of assistance anyway.
IDAs would have to develop standard criteria for evaluating and selecting projects, including a cost-benefit analysis for each project.
The bill requires uniform project agreements and standard policies to discontinue or recoup benefits if projects fail to meet targets.
Key Data
$8 billion
— Annual spending on economic development through myriad state and local programs.
109
— Number of local Industrial Development Agencies (IDAs) that currently lack uniform review and monitoring procedures.
$660 million
— Annual tax breaks provided by local Industrial Development Agencies.
New York State has significantly increased spending on economic development programs and tax breaks despite a lack of clear evidence that these subsidies generate positive economic returns. State leaders should prioritize rigorous economic impact analyses and establish clear performance metrics before committing billions in taxpayer funds to these initiatives.
Recommendations related to Economic Development Transparency
State leaders should seek better evidence that large subsidies produce positive returns for New York before adopting new capital funding or expanding tax credit programs to ensure economic development transparency.
The state should conduct in-depth economic analyses for all economic development programs to prove their ability to induce new economic activity.
Policymakers should establish clear criteria for selecting projects to improve the transparency and accountability of capital grants.
Key Data
$8 billion
— Total state and local spending for economic development activities in 2014.
$2 billion
— Amount added to economic development programs in the fiscal year 2016 state budget.
$5.7 billion
— Planned capital disbursements for Empire State Development for fiscal years 2016 to 2020.
88 percent
— Increase in planned capital disbursements for Empire State Development compared to actual disbursements over the previous five years.
$570 million
— Net loss in tax revenue from film and TV production tax credits awarded in 2013 and 2014.
30 percent
— Value of the fully refundable film tax credit relative to qualified expenditures.
New York's economic development programs have grown in cost from $7.0 billion in 2010 to $8.1 billion in 2014, yet measuring their actual economic benefits remains difficult due to a lack of standardized metrics and reporting. To ensure taxpayer value, the state must implement more rigorous evaluation, standardized performance metrics, and comprehensive disclosure requirements for all projects.
Recommendations related to Economic Development Transparency
New York State should implement additional disclosure requirements, accountability measures, and program evaluations to better assess the value of economic development investments.
All economic development investments should be coordinated and aligned to regional strategies to improve cost-effectiveness.
The state should ensure that performance metrics are standardized for all programs and across all regions.
More comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
Key Data
$1.5 billion
— Proposed spending for the Upstate Revitalization initiative from the state's windfall from bank settlements.
$7.0 billion
— Cost of New York's economic development programs in 2010.
$8.1 billion
— Cost of New York's economic development programs in 2014.
New York's economic development spending grew to $8.1 billion by 2014, yet many programs lack sufficient accountability, standardized metrics, and evidence-based targeting. To improve cost-effectiveness, the state should implement a unified economic development budget, standardize performance metrics, and reevaluate programs before expanding them or creating new ones.
Recommendations related to Economic Development Transparency
All investments should be coordinated and aligned to regional strategies, performance metrics should be standardized for all programs and across all regions, and more comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
In addition, all programs should be reevaluated for effectiveness before existing programs are increased or new ones are added.
The framework for designing and evaluating economic development programs identified by the commission in 2011 should be utilized.
The qualifications for Excelsior tax credits, already weakened once, should be strengthened.
Additional disclosure, accountability measures, and program evaluation are required.
Key Data
$8.1 billion
— Annual economic development investments in 2014.
$7.0 billion
— Annual economic development investments in 2010.
$427 million
— Estimated cost of the film tax credit in 2014.
$1.2 billion
— State's unused Investment Tax Credit liability as of 2013.
$2.9 billion
— Total amount awarded to Regional Economic Development Councils from 2011 through 2014.
$1.3 billion
— ESD's total capital spending from fiscal year 2005 to 2009.
New York City spends nearly $3 billion annually on economic development, yet many of these subsidies go to projects that would be profitable without government assistance. To improve effectiveness, the city should increase transparency regarding discretionary tax benefits and ensure that financial support is only provided after companies demonstrate they have fulfilled job creation promises.
Recommendations related to Economic Development Transparency
The city should reduce the length of benefits provided and exclude projects that clearly will be profitable without subsidies.
The city needs more transparency regarding how discretionary tax benefits are granted, what size of subsidy is appropriate, and how subsidies are bundled or layered with other tax breaks and benefits.
The city should be monitoring these deals more closely and structuring them to provide benefits after firms provide proof they have met their job creation promises.
The city should narrow economic development investments to those that enhance infrastructure in neighborhoods with growth potential.
Key Data
$3 Billion
— Annual amount New York City spends to cultivate industries, attract and keep businesses, and stimulate development.
New York City's economic development programs have grown significantly, with annual tax expenditures reaching $1.6 billion and capital spending rising to $751 million by 2012. To improve future performance, the city should enhance transparency in discretionary benefit awards, reform cost-ineffective tax expenditure programs, and better manage the Economic Development Corporation's focus on job creation.
Recommendations related to Economic Development Transparency
The next administration should use capital investments to enhance infrastructure in neighborhoods with job growth potential rather than supporting individual firms as beneficiaries.
The city should encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing while avoiding direct capital grants.
The city must continue reform of as-of-right tax expenditure programs to make them more cost-effective by implementing greater restrictions on retail benefits and shorter durations.
The city should establish clearer standards for awarding discretionary tax expenditure benefits, such as capping the level of per-job subsidies.
The city should continue rezoning and expand special mixed use districts to facilitate diversified job growth in areas currently limited to industrial use.
The city should better manage the Economic Development Corporation by focusing on job creation and enhancing transparency in the administration of discretionary tax exemptions.
Key Data
$1.6 billion
— Annual tax expenditures in 2012, which more than doubled over the previous decade.
$751 million
— Annual capital spending on economic development in 2012, which nearly tripled since 2002.
$9.7 billion
— Total conduit debt outstanding in 2012, reflecting the large-scale use of this financing tool.
$368 million
— Relevant operating expenditures for economic development in 2012.
$238 million
— Annual cost of discretionary tax expenditure benefits.
$2,000 to $398,000
— Range of benefit per job awarded for discretionary projects in fiscal years 2010 and 2011.
New York should halt the expansion of economic development spending until the state can systematically scrutinize and justify its business subsidies, as most of the $7 billion spent annually lacks adequate controls. The state should also limit sales tax breaks granted by local Industrial Development Agencies to ensure they meet rigorous standards rather than increasing overall expenditures without better data.
Recommendations related to Economic Development Transparency
Until the State more systematically scrutinizes and justifies its subsidies for business, New York should not increase these economic development expenditures.
The State should adopt the Governor’s proposal to require projects to meet the standards of the Excelsior program and have Regional Council approval in order to receive any sales tax exemption.
Key Data
$800 million
— The amount by which the proposed budget increases spending for economic development activities.
$7 billion
— The amount currently spent annually in New York on economic development that lacks adequate controls or data to prove the investments are worthwhile.
$420 million
— The amount allocated for film tax breaks within the proposed economic development spending increase.
$150 million
— The amount allocated for the Regional Economic Development Councils within the proposed economic development spending increase.
$165 million
— The amount allocated for additional capital grants within the proposed economic development spending increase.
$50 million
— The amount allocated for a venture capital fund within the proposed economic development spending increase.
The state should freeze new economic development funding until a comprehensive review of existing programs is completed and performance metrics are fully evaluated. Currently, the state and local governments spend $7 billion annually on economic development, including $2.6 billion in tax credits and exemptions that have largely avoided scrutiny.
Recommendations related to Economic Development Transparency
No additional funds should be authorized for economic development programs until a thorough review of all of them has been conducted to assess whether they are working and until the results of the new performance metrics put in place by the Regional Councils can be evaluated.
Key Data
$365 million
— New capital grants authorized for economic development through the Regional Economic Development Councils in the last two budgets.
$7 billion
— The total amount that the State and its local governments spend on economic development each year.
$2.6 billion
— The amount in state tax credits and exemptions that have largely escaped scrutiny throughout the recession.
New York State and its local governments spend nearly $7 billion annually on economic development programs, many of which lack sufficient accountability and transparency. To improve the effectiveness of these investments, the state should standardize performance metrics, eliminate ineffective programs, and consolidate all spending data into a unified economic development budget.
Recommendations related to Economic Development Transparency
ESD should facilitate the development and reporting of meaningful and consistent metrics across all Councils and programs.
New York’s leaders should consider using the cap mechanism more widely to foster a more disciplined approach to economic development spending.
ESD should facilitate the convergence and standardization of the multiple criteria and scoring methods, making them more useful for decision making.
The CFA should be expanded and should serve as the platform for a unified economic development budget, or UEDB.
Key Data
$7 billion
— New York State and its local governments will spend close to $7 billion this fiscal year in the name of economic development.
$762 million
— New York will allocate $762 million in economic development funds through the Regional Economic Development Councils this year.
$300 million
— Economic development spending in New York increased by $300 million from 2010.
$100 million
— The new Excelsior program will cost $100 million in tax year 2012.
$4.5 billion
— The Missouri Accountability Portal covers $4.5 billion in tax incentives approved since 2000 through several dozen programs.
$3.8 billion
— The state's economic development tally includes $3.8 billion in tax incentives.
New York City's economic development reporting fails to capture the full scope of public spending, as significant portions of incentive packages—including state assistance and capital commitments—are excluded from cost-benefit analyses. Improving transparency by including these missing costs and convening the mandated methodology committee would enhance accountability and ensure government-funded benefits are justified.
Recommendations related to Economic Development Transparency
The Economic Development Corporation should include in its cost-benefit analysis the debt service associated with project-related capital commitments, similar to how it treats other incentives.
The methodology recommendation committee, created by Local Law 48, should be appointed and convened to discuss necessary adjustments to reporting measures.
Key Data
$1.4 billion
— Total assistance provided to more than 620 development projects over their lifespans.
$265 million
— Average annual capital commitments by the EDC over the past decade.
$125 million
— Total incentive package for the FreshDirect relocation.
$8,000
— Cost per job created according to EDC analysis.
$33.9 million
— State benefits excluded from the FreshDirect incentive package.
The New York State budget includes new funding for economic development programs despite a lack of accountability and performance metrics for existing initiatives. These programs, including regional grants and hydropower subsidies, should be systematically evaluated and overhauled to ensure transparency and effectiveness before additional financial commitments are made.
Recommendations related to Economic Development Transparency
Performance metrics and evaluative analysis should be systematically employed to identify failing programs for elimination or redesign before new programs are grafted onto an already fragmented governance structure.
Before additional financial commitments are made, accountability for existing economic development programs should be improved.
Instead of being subjected to additional parochial constraints, the economic development power programs should be completely overhauled.
Key Data
$6 billion
— Total annual economic development spending in New York State, including capital grants, tax breaks, and direct subsidies.
$150 million
— Capital grants allocated in the budget for regional economic development councils.
$75 million
— Funding for a new economic development fund created in the budget.
New York State's fragmented economic development system, which involves hundreds of entities and billions in annual spending, requires consolidation and standardized performance metrics to ensure accountability. Implementing a Unified Economic Development Budget would provide the necessary transparency to track the costs and benefits of these investments effectively.
Recommendations related to Economic Development Transparency
Do not authorize additional funds for another round of regional competition until the “hydra” of economic development is tamed.
Improve the accountability and transparency of all expenditures in this area to make sure that grants that were just made, and the preexisting programs in the area, are a success.
The apparatus of economic development in the State should be brought together under a management structure that works to make the most efficient and effective types of investments.
Empire State Development should develop a consistent set of performance measures that look not only at output measures, such as the number of jobs, but also at outcome measures, such as economic growth and poverty levels.
The goal should be full disclosure of the costs and benefits of every investment.
Key Data
$6.6 billion
— Annual state and local investment in direct subsidies and tax expenditures for economic development.
100
— Number of Industrial Development Agencies (IDAs) in New York State that demonstrate a need for consolidation.
6.5:1
— Leveraging ratio of public to private capital included in the North Country's regional economic development plan.
5:1
— Leveraging ratio of public to private capital included in the Capital Region's regional economic development plan.
28:1
— Leveraging ratio of public to private capital included in the Central New York regional economic development plan.
$783 million
— Amount of funding just awarded through the regional economic development competition.
New York's state budget faces significant pressure from rising costs, necessitating a halt to additional economic-development spending and a focus on fiscal sustainability. To improve outcomes, the state must prioritize transparency and accountability for the $6 billion in public subsidies currently allocated to private-sector projects.
Recommendations related to Economic Development Transparency
The state should halt the growth of economic-development spending to avoid unnecessary costs.
The state should ensure that the $6 billion in new and old money is used well, with transparency and accountability on any public subsidies for private-sector projects.
Key Data
$785 million
— Economic-development grants awarded by the state this month.
$200 million
— Additional economic-development grants intended to be proposed in the forthcoming executive budget.
$6 billion
— Total amount of new and old money allocated to public subsidies for private-sector projects.
New York's fragmented economic development landscape, which involves hundreds of entities and billions in annual spending, requires consolidation and standardized performance metrics to ensure accountability. Implementing a unified budget and paying subsidies only after businesses create jobs would improve transparency and ensure that new regional council funding comes from cutting ineffective programs rather than new spending.
Recommendations related to Economic Development Transparency
To tame the hydra, the councils should have authority over all state economic development resources, not just a subset.
The six, eight, 10, 14, 19, or even 23 IDAs operating in each of the regions should be consolidated into one per region.
Discount power programs of the New York Power Authority and the economic development programs of the New York State Energy Research and Development Authority should also be fully folded into the regional councils.
As Empire State Development helps the new councils develop metrics it should make sure that standard performance measures and benchmarks are used in every region.
Benefits should be paid retroactively based on firm performance.
A Unified Economic Development Budget, including tax expenditures, subsidies (including discounted power) and local add-ons should be prepared and released for each region.
Funds for the Regional Councils should be generated by reducing unsuccessful current programs.
Key Data
$6.6 billion
— Estimated annual cost of incentives dispensed by hundreds of entities at the state and local level.
$2.5 billion
— Annual reduction in state tax receipts due to more than a dozen separate state tax credit programs.
$1.8 billion
— Annual spending by seven state public authorities and six state agencies.
$1.3 billion
— Annual investment by municipalities.
$1.0 billion
— Annual expenditure by 107 Industrial Development Agencies (IDAs) and New York City.
New York's economic development programs suffer from a lack of transparency and accountability, with billions of dollars in annual spending spread across hundreds of entities without clear performance metrics. To improve outcomes, the state should implement a unified economic development budget, standardize performance reporting, and require retroactive, results-based payments for all subsidies.
Recommendations related to Economic Development Transparency
The councils should have responsibility and authority over all state economic development resources, not just a subset of selected programs.
ESD should ensure that consistent performance measures and standard benchmarks are used in every regional plan.
Benefits should be paid retroactively based on firm performance to ensure accountability.
The state should prioritize the creation of a Unified Economic Development Budget to improve transparency.
More comprehensive disclosure requirements and reporting would provide some guard against the politicized nature of some of the deals of the past.
All programs should be considered for elimination before the budget for economic development is increased.
Key Data
$6.6 billion
— Annual cost to the State of economic development programs in lost tax revenues, power subsidies, and direct spending.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
$1.8 billion
— Annual spending by seven state public authorities and six state agencies on redevelopment projects and debt service.
$1.3 billion
— Annual investment in economic development by municipalities.
$1.0 billion
— Annual tax breaks provided by Industrial Development Agencies and the City of New York.
$554 million
— Cost of the Empire Zone program in 2010 in lost tax receipts.
New York's economic development programs are currently uncoordinated and lack sufficient oversight, resulting in the inefficient use of over $5 billion in annual public spending. To improve outcomes, the state must implement standardized disclosures, require strict accountability for job creation, and ensure tax incentives are only awarded to firms that generate quality employment.
Recommendations related to Economic Development Transparency
The best way to assure that the taxpayer is truly getting "bang for the buck" is to require total transparency and accountability in the awarding of benefits.
There must be clear, publicly disclosed performance metrics and regular reporting on how businesses are doing in meeting their job and investment targets.
A regional approach should also include standardized applications and disclosures, and a statewide plan for targeting program dollars to areas and industries that have the greatest need.
Tax benefits and other incentives should go only to firms that actually generate quality new jobs in the state.
Benefits should be paid when job creation goals are actually met, not simply promised, and should be graduated to incentivize the creation of better, higher-paying jobs.
New programs should start small so that we can learn what works and scuttle the rest.
All economic development activities should be part of a coordinated state-wide strategy that makes targeted moderate investments to key industries in our communities.
Key Data
$300 million
— Annual amount of local tax breaks awarded by New York's 115 Industrial Development Agencies.
115
— Number of Industrial Development Agencies in New York that award tax breaks.
$5 billion
— Annual amount of public money spent on haphazard, unproductive economic development programs and business tax breaks.
The New York Power Authority's economic development programs lack transparency and clear cost-benefit justifications, often failing to align with the state's broader energy and economic goals. These programs, which provide discounted power to businesses, require a comprehensive overhaul to ensure public accountability and better support for strategic economic development.
Recommendations related to Economic Development Transparency
Phase out current programs by allowing current contracts to expire without passing new legislation to reauthorize them.
Include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
Sell power no longer used for economic development at market rates to generate additional revenue for the state.
Link energy conservation and economic development goals and programs by requiring firms receiving benefits to submit to energy audits.
As the old programs are phased out, they should be subject to greater disclosure requirements to improve transparency.
Key Data
$479 million to $640 million
— Estimated annual cost range of the New York Power Authority's economic development programs.
453,914
— Total number of jobs committed across all nine economic development programs.
1.8 cents to 2.2 cents
— Price per kilowatt-hour paid by program recipients in 2007.
6.7 cents
— Market rate per kilowatt-hour for electricity in 2007.
The Empire Zones program should be allowed to expire due to its history of being an ineffective and costly investment for taxpayers. A new economic development strategy should be adopted that ensures benefits are temporary, targeted, and allocated based on objective criteria rather than political or geographic considerations.
Recommendations related to Economic Development Transparency
Allow the seriously flawed Empire Zones program to sunset as of June 30, 2010, as established by law.
Enact the Excelsior program as proposed by the Governor.
Do not continue policies that have proven ineffective, such as extending local Empire Zone administration boards and wage credits.
Ensure that state economic development programs allocate benefits based on pre-determined criteria rather than geographic or political parity.
Ensure that state economic development programs calculate benefits according to actual increases in private sector investment.
New York State's Empire Zone program, originally intended to assist economically distressed areas, has become an ineffective and opaque vehicle for providing tax breaks to corporations without clear, verifiable justification. Due to its persistent failure to meet job creation and investment targets, as well as its lack of accountability and transparency, the program should be abolished.
Recommendations related to Economic Development Transparency
The Empire Zone program should be abolished because its problems are extensive and longstanding.
The State should stop spending increasingly scarce public resources on an unproductive program that fails to meet its economic development goals.
New York State should replace the Empire Zone program with a more effective economic development strategy that does not rely on lucrative tax breaks for sophisticated firms.
The State should require the application of a cost-benefit test for businesses receiving disproportionately large tax benefits.
The State should enforce more stringent performance targets and procedures for collecting accurate data to ensure accountability.
Key Data
$582 million
— The cost of the Empire Zone program in 2008, representing a twenty-fold increase from $30 million in 2000.
76%
— The share of the $514 million in total credits claimed by just 500 firms in 2006.
70%
— The percentage of businesses receiving tax breaks in audited zones that failed to meet their job creation targets.
58.2%
— The percentage of firms participating in the program that missed their job or investment targets by at least 60 percent in 2005.
$31.7 million
— The amount of tax credits claimed by the largest beneficiary, IBM, in 2006.
9,800
— The number of certified businesses employing more than 380,000 people in 82 Empire Zones statewide.
The Empire Zone program has expanded beyond its original mission, resulting in unsustainable costs and a lack of accountability for firms that fail to meet economic targets. Future economic development initiatives should be replaced with programs that prioritize clear performance metrics, transparent cost-benefit reporting, and post-facto accountability for recipients.
Recommendations related to Economic Development Transparency
New programs should be aligned with a clear and overarching economic development strategy for New York State that articulates goals, objectives, and the metrics needed to measure performance.
Reporting and disclosure of cost-benefit calculations for all economic development subsidies should be improved.
Subsidies aimed at retention in manufacturing and other sectors should be clearly delineated and paired with appropriate measurements of their success or failure.
The best way to ensure outcomes is to base program payments on performance post-facto rather than on projections made upon approval.
More central administration is critical to improving outcomes by improving and standardizing practices.
Key Data
$580 million
— The cost of the Empire Zone program in 2008.
45 percent
— The average annual growth rate of the program's cost from 2000 to 2008.
$2,200
— The median benefits per job for program participants.
$690,000
— The amount Manhattan Nursing Home Realty received in 2006 for adding a single job.
58 percent
— The portion of firms in the program that fell short of either their job or investment targets by more than 60 percent.
79 percent
— The portion of the 570 Empire Zone beneficiaries in New York City that failed to meet their targets.
New York's power-based economic development programs lack transparency and fail to align with state energy goals, often providing deep subsidies to a small number of firms without clear cost-benefit justification. State leaders should phase out these programs, implement rigorous disclosure requirements, and integrate energy conservation mandates into any future economic assistance.
Recommendations related to Economic Development Transparency
State leaders should phase out current economic development programs by allowing existing contracts to expire and passing no new legislation to reauthorize them.
As programs are phased out, they should be subject to greater disclosure requirements, including listing program participants on a state-administered website.
The state should include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
The Authority should sell power no longer used for economic development at market rates to ensure funds remain devoted to economic development goals or infrastructure improvements.
The state should link energy conservation and economic development goals by requiring firms that receive benefits to submit to energy audits and comply with efficiency best practices.
Key Data
$479 million to $640 million
— Estimated annual spending by the New York Power Authority on nine economic development programs.
$362 million to $489 million
— Estimated total cost range for the five hydro economic development programs.
$117 million to $151 million
— Estimated total cost range for the five purchased power economic development programs.
$5,836 to $7,883
— Per-job subsidy range offered by the five hydro economic development programs.
$247 to $630
— Per-job subsidy range offered by the five purchased power economic development programs.
$157 million
— Estimated annual subsidy worth provided to Alcoa in exchange for capital improvements.
The New York Power Authority's nine economic development programs, which provide discounted electricity to businesses, lack transparency and fail to align with the state's broader energy and economic goals. The report proposes a comprehensive overhaul, including phasing out existing programs, selling excess power at market rates, and integrating energy conservation requirements into future economic development assistance.
Recommendations related to Economic Development Transparency
New York should phase out current programs and allow current contracts to expire without passing new legislation to reauthorize them.
State leaders should include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
NYPA should sell power no longer used for economic development at market rates to generate additional revenue and increase its operating surplus.
The state should link energy conservation and economic development goals and programs by requiring firms that receive benefits to submit to energy audits and comply with best practices.
Key Data
$479 million to $640 million
— Estimated annual cost of NYPA's economic development programs.
2,322 megawatts
— Total power reserved for selected firms under NYPA's economic development programs.
453,914
— Total jobs committed by firms participating in NYPA's economic development programs.
$424 million
— Total 'voluntary' contributions made by NYPA to the State's general fund between 2002 and March 2008.
New York's Empire Zone program has morphed from a targeted initiative for distressed areas into an ineffective, loophole-ridden vehicle for corporate tax breaks that lacks transparency and accountability. Given the program's failure to meet job creation targets and its drain on public resources, it should be abolished.
Recommendations related to Economic Development Transparency
The Empire Zone program should be abolished because its problems are extensive and longstanding.
Increasingly scarce public resources should no longer be spent in this unproductive way.
The State should eliminate the Empire Zone program entirely.
The State must apply consistent standards for certifying businesses or monitoring outcomes to ensure accountability.
The State should require the application of a cost-benefit test for businesses receiving disproportionately large tax benefits.
Key Data
$582 million
— The cost of the Empire Zone program in 2008.
$30 million
— The cost of the Empire Zone program in 2000.
70 percent
— The portion of businesses receiving tax breaks in audited zones that failed to meet job creation targets.
$514 million
— The total amount of tax credits claimed by firms in 2006.
$900 million
— The amount of unused tax credits firms have that can be used in future years.
9,800
— The number of certified businesses in 82 Empire Zones statewide.
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