The Citizen’s Budget Commission (CBC), a New York City-based independent fiscal watchdog, recently released a report titled ‘Bigger Not Better,’ which looks at the growth of the state’s “economic development investments” since 2010.
It finds that some state economic development programs have been “modestly reformed,” but expresses concerns about how some programs (film production tax credit, brownfields and Investment Tax Credit) “are expanding despite ongoing concerns about their efficacy and the presence of loopholes that have allowed programs to be used more broadly than originally intended.” The report also identifies the START-UP NY program as potentially problematic moving forward as the state continues to add tax-free areas.
The report recommends that a framework for designing and evaluating economic development programs should be put in place: “all investments should be coordinated and aligned to regional strategies, performance metrics should be standardized for all programs and across all regions, and more comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed. In addition, all programs should be reevaluated for effectiveness before existing programs are increased or new ones are added.”
CBC President Carol Kellermann said:
“It is clear New York State’s economic development programs are growing in number and cost. What is unclear is whether the investments are worthwhile.”