Another Voice: Legislation would mandate critical reforms to corporate tax incentive programs - The Buffalo News

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Another Voice: Legislation would mandate critical reforms to corporate tax incentive programs

By Richard Lipsitz

Gov. Andrew M. Cuomo’s new economic development programs, the Excelsior Jobs Program and Regional Economic Development Councils, incorporate many of the industry’s best practices, including requiring subsidized companies to set job creation goals, mandatory clawbacks and detailed annual reporting. Unfortunately, too many economic development programs remain deeply flawed.

The goal of our state leaders should be to bring these programs up to par with these new economic development programs. The public is paying too high a price as a result of this disjointed system.

Economic development programs spend $7 billion on corporate tax subsidies each year in New York in the name of job creation. Too much of this money is spent on corporations that fail to deliver the jobs they promised.

Some programs grant tax breaks to businesses in return for promising to create or retain jobs. The Excelsior Jobs Program doesn’t grant tax benefits until firms have reached job creation goals, holding corporations accountable to their original promises.

As our communities continue to grapple with high unemployment and budget shortfalls, New York should make sensible reforms that ensure all economic development subsidies are smarter investments to revitalize the economy and create quality jobs for all. With limited resources, all economic development agencies should prioritize incentivizing companies that have a positive impact on our communities and create good local jobs.

Assemblyman Sean Ryan, D-Buffalo, and Sen. Diane Savino, D-Brooklyn, recently introduced legislation that resolves to fix our state’s $7 billion problem. The Just and Open Business Subsidies (JOBS) Act (A8203/S6870) will ensure that all of the state’s economic development programs include the industry’s best practices and that New Yorkers get the good jobs and smart investments we deserve from our taxpayer dollars.

If enacted, the JOBS Act reforms would require recipients of economic development subsidies to set clear good job and local hiring targets; transparently track subsidies and job creation on a single public website; and establish a “money-back guarantee” to recapture subsidies if recipients break their promises.

On Saturday, the WNY Area Labor Federation held its annual town hall meeting. Each year, the Labor Federation invites the members of the entire Western New York state delegation to discuss where they stand on issues affecting working people. This year, one of our top priorities is the JOBS Act and we will encourage our state representatives to step up to support this and other important legislative priorities for working people.

Richard Lipsitz is president of the WNY Area Labor Federation.

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