INTRODUCED: 06.18.04
SPONSOR: Assembly Rules Committee (Assemblyman Richard Brodsky)

PASSED THE ASSEMBLY: 06.22.04 [Yes-128, No-20]; died in the Senate

The Legislation:
The State Financial Incentive Protection Act would prohibit any business receiving financial incentives from the state, including loans, tax breaks or grants, from outsourcing jobs outside of New York. Any company that does outsource jobs within a year of receiving incentives would be required to return the subsidies it received or be denied any further state incentives for five years. The prohibition on outsourcing wouldn’t apply if the company also created new jobs in New York within a year, so that there was no net loss of jobs to the state. The bill would also require the state Economic Development Corporation and the companies receiving subsidies to report annually to the Attorney General on the amounts of subsidies and the numbers of jobs lost or created by the company in New York.

The middle-class position:
The Middle Class Supports: Over the past 15 years, upstate New York has lost tens of thousands of well-paid manufacturing jobs that once afforded New Yorkers a solidly middle-class standard of living. At the same time, the state provides millions of dollars each year in taxpayer- funded subsidies to companies in an effort to spur job creation. Yet little information is available to monitor whether the companies that receive incentives are, in fact, creating new jobs or actually moving jobs out of the state while they enjoy public largesse. By requiring companies to give back public money if they reduce their number of jobs in New York, this bill would hold companies, and the state’s economic development corporation, accountable. While private businesses are free to make a business decision to lay off workers or shift employment overseas, the people of New York have no obligation to subsidize them for doing so.

from the experts:
“With public money comes public responsibility... Why should hard-working taxpayers subsidize an employer who outsources jobs to maximize corporate profits, leaving New Yorkers caught in a jobless recovery? Denying subsidies to an outsourcing corporation isn’t punishment; it’s common sense. We should use our limited corporate subsidies to reward employers who actually create New York jobs.”

——NYS Assemblyman Richard Brodsky
(March 26, 2004)

“In return for all our taxpayer dollars we are not getting higher wages, better benefits, a stronger tax base, or better public services... The only clear winners are large corporations. In return for building new facilities in many states, companies are actually getting negative income taxes... Guess who’s getting stuck with the tab. When the big boys pay less, either the rest of us pay more or the quality of our public services declines—and usually it’s some of both.”

—Greg LeRoy, author, The Great American Jobs Scam

“The closed-door process of distributing corporate subsidies fuels a growing sense of disenfranchisement, further mutes civic engagement and ultimately erodes our democratic institutions. It’s time to open the doors on corporate subsidies and offer better accountability to the New Yorkers who pay for them.”

——Alice Meaker, former director, Good Jobs New York

Number of
manufacturing
jobs lost in the
Hudson Valley
between 2001
and 2004:
9,000

Total number
of jobs lost
in Rochester
during 2004::
5,200

State job creation
and retention
subsidies offered
to Kodak in 1995:
$27.1 million

Minimum number
of Rochester
workers Kodak
has laid off
since then:
6,000

Value of tax
incentives General
Electric received
as it was moving
hundreds of jobs
out of state:
$5.5 million

Percentage of
companies
subsidized by the
Empire State
Development
Corporation that
failed to meet their
job retention or
creation goal,
according to the
State Comptroller:
47.8%