Yet Another Corporate Welfare Example Of Scamming Taxpayers
by Paul Wolf - posted 12:02 am, June 12, 2015
According to Senator Chuck Schumer, Hamburg Supervisor Steven Walters, and the Hamburg Industrial Development Agency, $8 million in tax breaks would create 400 to 600 jobs. The reality pointed out in the Buffalo News is that 32 jobs will be created.
No one knows where the 400 to 600 number came from, but FedEx in their application for the tax breaks projected 32 jobs will be created by 2020.
When the hype around the number of jobs actually being projected is brought to light, the best the Hamburg IDA can come up with is “whatever the number of jobs, it is better than no jobs.”
Of course the argument is also made that if the $8 million in breaks were not provided the company would have relocated elsewhere. Despite the fact that FedEx in their application stated they had not been offered financial assistance to locate outside of New York State.
Politicians desperate for ribbon cuttings and press conferences that show them doing something often mislead the public. It is all part of the corporate welfare scam that gets played over and over.
The failure of New York’s tax subsidized economic development efforts have been documented in many audits by the New York State Comptroller’s Office. In February of 2015, the State Comptroller released an audit of the Empire State Development Corporation (ESDC). The ESDC is New York’s chief economic development agency.
According to the Audit, ESDC provides over $1 billion in incentives to private corporations. In 2013, ESDC reported that they assisted 201 employers create 2,424 jobs, which represents 1.8 percent of the net private sector jobs created in 2013. Empire State Development has debts on its books in the amount of $10.7 billion, employs 290 people and has more than 200 created subsidiary corporations. ESDC is a bureaucratic mess that doles out public funds to a select few businesses without much in tangible results to show.
One of the conclusions reached by the State Comptroller Audit was:
“While ESDC has been charged with administering more than 50 economic development programs, it provides little public information regarding the results of taxpayer-funded investments in its initiatives. ESDC makes no public assessment of whether its disparate programs work effectively together, whether such initiatives have succeeded or failed at creating good jobs for New Yorkers, or whether its investments are reasonable in relation to jobs created and retained. It is unclear to what extent ESDC’s programs drive net job creation in the State.”
The corporate welfare scam continues, with the Hamburg FedEx project being just the latest example.