State subsidy system lacks transparency at regional level
New York state’s economic development programs lack transparency and accountability at a regional level, according to a new report released Monday by the left-leaning Alliance for a Greater New York (ALIGN).
Only seven of the top 15 programs report regional data, and most don’t provide enough detail for their performance to be assessed, the report found.
Political director of ALIGN, Thomas Garduno says a lack of reporting makes it hard to know whether or not business subsidies are working.
“We’ve basically found three main things; that subsidy spending is really high, that it’s very uncoordinated, and that there’s really no way to track whether or not they’re actually creating the kinds of jobs that will make subsidies worth our taxpayer dollars,” Garduno says.
He says the little information they were able to gather from economic development programs pointed to a bad deal for most regions.
New York spends about $7 billion a year on business subsidies and Garduno says that money goes to only 4 percent of businesses. A lack of coordination means there’s often an overlap in subsidy programs, he says.
“For example, Target is currently receiving 14 separate subsidies across New York for their overall retail stores and warehouses, including locations in the Finger Lakes. And so, when people say these things are necessary to create jobs I think the question that we really should be asking is, what kinds of jobs are they creating and are they creating these jobs?”
IDAs failing to create jobs
Industrial Development Agencies (IDAs) have the highest level of reporting on a regional basis, according to the report. But, Garduno says, there's still a significant lack of information. And, the reporting that does exist raises some serious concerns.
“Even with that information we’ve found that nearly 33 percent of IDA’s net spending resulted in no job promise, no job creation, or even worse yet, a loss of jobs.”
On average, more than 70 percent of projects completed by IDAs in 2011 failed to create jobs, didn’t meet their goals, or didn’t set any to begin with.
Central New York faired worst, with 85 percent of projects failing to meet job targets. The Finger Lakes performed best but still had a failure rate of over 50 percent, says Garduno.
And, he says, implementation of subsidies at a local level are also raising issues.
More reporting needed at local level
The lack of accountability and coordination of programs can lead to misuse of taxpayer dollars, Garduno says.
Recent allegations tied to Local Development Corporations in Monroe County saw several men arrested, including the husband of County Executive Maggie Brooks.
And, Garduno says similar corruption could be occurring across the state.
“Local development corporations are the main way that these subsidies actually are enacted on the local level,” he said.
“We don’t know what’s going on in other places and I think unfortunately all that we can assume is that the particular malfeasance that is happening in local areas is most likely rampant statewide.”
ALIGN is calling for higher reporting standards and more coordination of economic development programs across the state to safeguard taxpayer dollars.
“What we need is actual data and actual facts. And we believe that the little bit of information we’ve been able to scrounge up through significant hours of research shows us just how dire of a need it is for this information to be public and to be easily accessible, and that if the information that we’ve found is any indication that the public will be absolutely appalled,” Gardino added.