New York is in the unenviable position of having to pay for the jobs it attracts. Most states offer tax breaks and incentives to lure employers, but this state has been so financially abused that it has to offer huge packages to make up for the state's exorbitant taxes, exorbitant labor costs and exorbitant price of electricity.
That is why the state ended up providing a $1.2 billion incentive package to a company mainly owned by the nation of Abu Dhabi, one of the world's wealthiest oil nations. It's not that the company, Advanced Technology, actually needed the money; it's that it needed the money to offset the higher long-term costs of locating here. New York's obnoxious business environment, together with competition from other states, meant that it could have gone elsewhere. Instead, New York got it -- upstate New York, in fact. The plant is to be built in Saratoga County, just north of Albany.
And yet . . . while that is an undeniably positive result, the bottom line is that this package provides $1 million of public money per job created, a staggering amount of money. Even with high-paying jobs to be created at the new computer chip manufacturing plant, it will take years for state and local governments to recoup that money.
What is more, that money is being committed just as the state is entering a historic financial crisis. Wall Street's slide is alongside Albany's, since the state looks to the financial sector for 20 percent of its annual revenues.
In context, that per-job price tag puts this package among the most expensive in New York, according to the Citizens Budget Commission, though other packages have ballooned as high as $2 million per job. Once you're in the club, it is incumbent on government officials to monitor the project and ensure the employer is meeting all its obligations.
For the long term, though, it remains critical for Albany to make this state friendlier to business. Taxes, regulations and power costs all need to be reduced if the state hopes to attract more such employers without having to pay a king's ransom.
It's good that upstate New York secured this plant. It happened, in good part, because of the influence of former Senate Majority Leader Joseph L. Bruno, who lives in the Capital Region. Here's hoping more such plants will be built upstate and that Albany can keep the costs of securing them lower than $1 million per job.