Three Huge Corporate Welfare Schemes Failing New York Taxpayers, Job Seekers, Small Businesses

East Fishkill, NY - Assemblyman Kieran Michael Lalor slammed New York's film tax credit program as wasteful corporate welfare again today with the revelation in a report from Empire State Development that appears to state that the average hire under the program is paid only $4,449.76 while New York taxpayers subsidize an average of $2,921.71 for those jobs. The just released Empire State Development report covers numbers for the fourth quarter of 2015. The average amount paid was obtained by dividing $208,280,088.00 in credit eligible wages by 46,807 total hires. The amount of pay per hire paid for by the taxpayer was calculated by dividing the $136,756,823 credit issued amount by 46,807 total hires. However, the data provided in the report contains too many unknowns to say exactly how much the average hire under this program is being paid because the credit amount is not based solely on wages, but also on additional production costs. So, it is likely the average hire is making less than $4,449.76. Unfortunately, the data detailing each individual cost by the companies and how the credit amount was determined for each production is not included in the data provided by Empire State Development.

"The bottom line regarding the $420 million taxpayers give to Hollywood each year is this: The studios are getting hundreds of millions of dollars while New Yorkers are likely being paid on average less than $4,449.76 for temporary work as set builders, movie extras and the like; while New York's long suffering taxpayers are being stuck with most of the bill," said Lalor.

"New York taxpayers are funding almost two-thirds of these salaries through corporate welfare," said Lalor. "The Empire State Development report shows, once again, that the Hollywood tax credits aren't growing New York's economy. But they are lining the pockets of campaign donors, as emails leaked in the Sony hack have revealed the pay-to-play nature of these subsidies. Even Governor Cuomo's own tax reform commission determined that the Hollywood tax credits are a losing investment for taxpayers. Yet, New York continues to subsidize Hollywood to the tune of $420 million a year. That money would be better spent delivering across-the-board tax cuts to all New Yorkers."

Lalor continued, "Unfortunately, Albany is hiding most of the details about the Hollywood tax subsidies. We don't know what positions are included in the total hires number from Empire State Development, making it difficult to compare wages. This lack of transparency and the little information that is available doesn't even allow the press or policymakers to perform the most basic cost-benefit analysis. That situation says everything we need to know about this corporate welfare. If it was working, Albany would be more revealing with the numbers."

Lalor added, "New York's most advertised corporate welfare program, Start-Up NY, is failing but still enjoys bipartisan support. In it's first year, Start-Up NY cost taxpayers millions and only created 76 jobs at the cost of $697,368 each. The latest Start-Up NY report was due on April 1st, but it hasn't been released yet. I think we can expect Empire State Development will try to bury it with a release on the Friday before Memorial Day weekend."

Meanwhile, federal prosecutors continue to investigate the Buffalo Billion and the Wall Street Journal reports that the Buffalo Billion is even riskier for New York taxpayers than we thought. Solar City's gigafactory is the centerpiece of the Buffalo Billion, but the company is delicately propped up by loans back and forth between it's CEO and his other companies. From the Journal article: "'As an analyst, it is often a red flag for me when companies and management direct loans between entities they have personal or financial interests in,' said Nathan Weiss, founder and senior analyst at independent research firm Unit Economics LLC in East Greenwich, R.I."

Lalor concluded, "Corporate welfare isn't working for New York. It's just lining the pockets of campaign donors and propping up risky ventures. We need to end this waste of public funds and return that money to the taxpaying individuals and businesses who earned it."