NEW YORK — 99 New York State Senators and Assembly Members today committed to block any state budget cuts without first raising revenue from the wealthy to close the state’s $14.3 billion budget deficit. The 99 electeds joined with 16 labor unions, including 1199SEIU and 32BJ SEIU, in pledging to block cuts without a wealth tax. Yet Governor Andrew Cuomo continues to refuse to consider raising revenue, and is instead planning to cut at least $10 billion from nurses, public school teachers, senior services and food banks. New data released in May revealed the net worth of New York’s 118 billionaires increased by $44.9 billion during coronavirus.
NEW YORK STATE LEGISLATURE Senate Finance Committee Assembly Ways & Means Committee
Senator Liz Krueger, Chair
Assembly Member Helene Weinstein, Chair
HEARINGS ON THE 2022-23 EXECUTIVE BUDGET PROPOSAL: ECONOMIC DEVELOPMENT
Testimony of
Michael Kink, Esq. * Executive Director
February 16, 2022 Testimony by video
Good afternoon Senator Krueger and Assembly Member Weinstein and members of the Committee. My name is Michael Kink, and I serve as the Executive Director of the Strong Economy for All Coalition. Thank you for the opportunity to present testimony today.
Strong Economy for All is a labor-community coalition working on issues of economic fairness, jobs, income inequality and effective government policies to promote broad prosperity.
We are made up of some of New York’s most engaged and effective unions and community organizations, including SEIU Locals 1199 and 32BJ; the United Federation of Teachers, New York State United Teachers and the Professional Staff Congress of CUNY, NYSUT; the New York State Nurses Association, the Retail, Wholesale and Department Store Union and the Communication Workers of America; the New York City Central Labor Council, the Municipal Labor Committee; and community groups including the Coalition for the Homeless, Citizen Action of New York, Make the Road New York, New York Communities for Change and the Alliance for Quality Education.
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New York State government has made a lot of progress in the last three years – huge new legislative packages have been passed into law on democracy and voting, on reproductive health care, on immigrant rights, on public health and on environmental justice.
The Legislature has done amazing, transformational work to make New York a real national progressive leader – and last year, you brought that energy and devotion to your constituents to budget and fiscal issues.
You recognized that short-term federal funding wasn’t enough to move New York out of our triple crises of COVID, racial inequity and extreme inequality. You courageously implemented fair, progressive tax increases on wealthy New Yorkers and on big corporations to fund long-term investments in people and communities.
The Legislature has made so much progress in so many areas – and now it’s time to transform our current “economic development” programs into something that will actually benefit all New Yorkers, rather than just a small number of wealthy and well-connected corporations.
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We need to reform and reprogram “economic development” spending into programs and projects that advance the public good.
Coming back from COVID means addressing extreme inequality through public investments that will benefit regular New York families in their daily lives. And a strong economy for all means more than dollars and cents.
To achieve this goal and win these investments we must reprioritize, and revolutionize how New York State invests.
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Real, comprehensive reform will take real, deep work by the Legislature: more hearings, extensive testimony under oath and a liberal use of subpoenas to state, county and local economic development agencies to develop the full record of abuse, corruption and greed.
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Our current so-called “economic development” programs have drawn criticism from the
left, right and center for ineffective spending and straight-out corruption.
State leaders, including both former Governor Andew Cuomo and current Governor Kathy Hochul, have thrown money at private businesses in wild and wasteful ways. A data and call center in Lockport got a half-billion in subsidies amounting to $2.4 million for every job created. A money-losing start-up just got a quarter billion in subsidies to create 68 jobs in rural Genesee County – that’s a ridiculous $4 million per job.
And out-of-control economic development programs have been marked by a string of corruption convictions for fraud, bribery and misuse of public funds, from Syracuse to Buffalo to Long Island.
A recent State Senate hearing demonstrated that officials at the relevant agencies still don’t have any clear standards for awarding subsidies and don’t keep track of returns on investment, if any. Beneficiaries of some subsidies claimed they were “successful” because they returned pennies on the dollar.
To deliver the economic opportunity that New Yorkers want and deserve, the Legislature must make sure that public resources actually work for the public. If this year’s budget simply delivers the same kind of insider deals that dominated the Cuomo era, it will amount to an epic failure and a clear signal that while Cuomo is gone, Cuomo-style corruption remains.
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Real reform will take time — but there’s a few places to start, this year:
REFORM AND REPROGRAM ALL “ECONOMIC DEVELOPMENT” SPENDING
● No More Business Tax Credits: Business tax credits generally don’t work to boost the economy, invite corruption, and rob the state of revenue.
STOP IDA GIVEAWAYS
● No More Tax Breaks: Eliminate the ability of IDAs and other economic development projects to give property tax, sales tax, and mortgage recording tax breaks to businesses.
STOP DIRECT GRANTS TO PRIVATE COMPANIES
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START INVESTING IN PEOPLE AND COMMUNITIES
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END ALL STATE AND LOCAL SUBSIDIES FOR WAREHOUSE & LOGISTICS FACILITIES, INCLUDING AMAZON
● Good Jobs First has also demonstrated how local and county tax breaks defund our public schools – local schools lose thousands of dollars per student to pay for ineffective, wasteful, fraudulent, corrupt and sometimes criminal giveaways to well-connected private businesses.
END ALL STATE AND LOCAL SUBSIDIES AND TAX BREAKS TO CAMPAIGN CONTRIBUTORS
● Whether it’s criminal corruption or the corruption of public ethics, the quid pro quo of donations for dollars is an outrage. There’s no way elected officials should be able to take campaign contributions and then direct public subsidies and tax breaks to their donors. It’s time to end wasteful tax breaks, corporate subsidies and real estate development favors to the well-connected.
As millions of us continue to struggle through a decades-long affordability crisis, we can’t afford to continue corrupt programs that fail to help regular New Yorkers while giving huge tax breaks to big businesses and wealthy New Yorkers who are richer than ever.
This year, it’s time to make sure “economic development” funding gets used for long-term direct investments in people and communities — that’s what creates real economic opportunity.
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Michael Kink, Executive Director of the Strong Economy For All Coalition, testified at before the Joint Legislative Budget Hearing on Taxes on a range of key issues:
Constitutionality of the New York billionaire mark-to-market Act
You can download a copy of his testimony here: Testimony
Strong Economy for All Coalition | Fiscal Policy Institute
Roosevelt Institute | National Employment Law Project
A NYS Stock Buyback Transfer Tax
How Do Stock Buybacks Destroy Jobs?
The Federal Tax Cut is Fueling a Corporate Buyback Splurge
A New York State Solution
For more information, contact Michael Kink of the Strong Economy for All Coalition at michael.kink@strongforall.org or Ron Deutsch of the Fiscal Policy Institute, at deutsch@fiscalpolicy.org.