Lalor: Cuomo’s $872K Per Job Central Planning Show Must End

December 13, 2017

East Fishkill, NY - 12/13/2017 - December 13, 2017: New York’s annual Regional Economic Development Council awards will be held in Albany later today. New York State Assemblyman Kieran Michael Lalor (R-East Fishkill) will not be attending the show. In advance of the awards presentation hosted by Governor Cuomo, Lalor blasted the program.

“Governor Cuomo is a central planner masquerading as a bizarro hedge fund manager who forces the taxpayers into risking their money so that some entity, chosen by the Governor, can reap the reward,” said Lalor.

According to Lalor, the program allows the Governor and the Albany elites in both parties to ignore the real economic problems of the state. “The regional councils do nothing about unsustainable state spending, which leads to high taxation. The councils do nothing to remedy state unfunded mandates on local governments that result in crushing property taxes. Likewise, the councils don’t do a thing to ease job-killing state regulations on businesses. These awards merely allow Cuomo and company to give the appearance of economic growth and prosperity when in reality there is stagnation and contraction. We should end this program and use the billions going to hand-picked entities to reduce the tax burden on New York workers and businesses,” said Lalor.

The ten regional economic development councils, created in 2011 by Cuomo, accept proposals from businesses, colleges, nonprofits and local governments to compete for state funding. Some critics have dubbed the process the ‘Hunger Games’ after the blockbuster movie because New York’s economically struggling regions are pitted against each other for survival.

Since 2011, the councils have allotted $4.4 billion statewide in grants, tax credits and bonds, with the Mid-Hudson region receiving $475.9 million. The Mid-Hudson region includes Orange, Ulster, Sullivan, Rockland, Westchester, Putnam and Dutchess Counties.

“The program has created just 546 new jobs in the Mid-Hudson region in six years. The average taxpayer subsidy for jobs created in this region is a staggering $872,000 per job. Even if you believe the Cuomo administration’s best-case scenario prediction that the $475.9 million in tax dollars spent over the past six years will ultimately produce 5,871 jobs, it still works out to more than $81,000 of taxpayer subsidy per job. The subsidy exceeds the per capita income for the New York Metropolitan area, which is about $65,000,” said Lalor.

Lalor points out that Cuomo’s administration admits that a quarter of the 5,871 jobs they projected in the Mid-Hudson region as a result of the nearly half billion spent by taxpayers are at the proposed Legoland in Orange County. The park is promising only 500 full-time employees with 300 part-timers and 500 seasonal workers. “We are going to be subsidizing many minimum wage, low wage, part-time and seasonal jobs. These jobs may have been coming to the area without any subsidy at all, due to other economic and geographic considerations that determine the location of a theme park.” said Lalor.

“Well-funded and sophisticated corporations often make the decision where to locate based on a myriad of factors and then see what they can get out of taxpayers by pretending that they are still deciding where to locate,” added Lalor.

A recent Times Herald-Record report indicates that economic development duds are common. The article states,“Some mid-Hudson projects that received the highest funding amounts yielded few or no jobs. Middletown’s Industrial Development Agency was given $4.6 million in bonding to buy and renovate Southeast Towers, a complex of 106 apartments for senior citizens. Empire State Development says that project resulted in two new jobs. The Solar Energy Consortium in New Paltz got a $1 million state grant in 2012 for a project that yielded no jobs.” See the full article here.

Earlier this week Stephanie Miner (D), mayor of Syracuse and ex officio member of the Central New York Regional Economic Development Council, said, "As a process, it is flawed, the end result is that it is flawed. Look at the data, these proposals have not moved the needle for anybody within upstate New York." State Senator Sen. John DeFrancisco,who serves on the same Regional Economic Development Council, indicated that the Governor has funded projects that the council was not asking for, including a $90 million factory that the Council never even discussed. See full article here.

Beyond the economic problems of the regional economic development councils, are the ethical issues stemming from the fact that there is little transparency and no prohibition on self-dealing by the members of the councils, who are free to advocate that state funding go toward their own entities. Attempts by some lawmakers to add accountability and transparency were thwarted by the Governor and some legislative leaders earlier this year.

Lalor concluded, “New York taxpayers are forced to spend $8 billion per year on the Regional Councils and other so-called economic development programs that have a proven track-record of failure. We should eliminate all, most or at least some of these programs and use the savings for across-the-board state tax relief or to ease the property tax burden by funding mandates on local government.”