June 14, 2013
By Marc Bussanich
New York, NY—New York spends $7 billion annually for economic development, but there’s no way to know how many, if any, jobs were created with that money because the recipients do a poor job in reporting, according to a new report. Watch Video
The Alliance for a Greater New York, a community-based organization focused on job creation, issued the report, “The $7 Billion Wager: New York’s Costly Gamble in Economic Development,” during a presser in Albany on Wednesday, May 29.
Josh Kellermann, Senior Policy Analyst at ALIGN, is the lead author of the report, and he recently said in an interview that New York is squandering an opportunity to create good jobs, especially in an era of austerity.
“This is a big issue, particularly in an era of financial constraint, that there’s a huge amount of money that could be re-purposed to actually build a good jobs economy for New Yorkers,” said Kellermann.
He noted that New York distributes the $7 billion annually via a mixture of subsidies in the form of low-interest loans, tax-exempt bonds, tax exemptions and tax credits that are intended to persuade businesses to remain in New York.
But the state relies on a decentralized mechanism to fund projects throughout the state, which makes it very difficult for the public to learn exactly how the money is being spent on projects and the number of jobs created on those projects.
“There is just dozens and dozens of programs that have very little coordination and cooperation between them. So what we’ve found is that there’s overlap, there’s wasted money, there’s resources spent on staff on different entities that could be potentially merged. But most importantly, there’s no strategic plan for spending this $7 billion,” Kellermann said.
Kellermann proposes that New York take a few modest steps to make it easier for the public to learn how the $7 billion is being spent, such as creating a single website that contains the entities that are financing projects.
“We think the $7 billion is a very important resource, and we don’t want to gamble with it. We want it to be invested, and to do that you simply need to create goals for recipients of this money. Once goals are formulated, then we can track it to get a sense of whether we are getting our money’s worth.”
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