NYC, Job Blackmail Capital of the U.S.
October 15th, 2005
In the name of job creation, corporations play cities against one another — threatening to leave one for the other, so that cities and states give the corporations tax breaks to stay, at a cost to taxpayers nationwide of some $50 billion a year. But, though these taxpayer subsidies “routinely exceed $100,000 per job,” the corporations rarely deliver on their promises, with few good jobs created or even retained: “The system is rigged,” argues George LeRoy, founder of Good Jobs First and the author of The Great American Jobs Scam: Corporate Tax Dodging and the Myth Of Job Creation.
Though both his book and an essay adapted from it published in The Nation this week ( “Scamming The States”) look nationwide, LeRoy makes clear that New York City is a particular victim:
“New York City is in a class by itself as the ‘job blackmail’ capital of the United States,” he writes in Chapter 1 of the book, (in pdf format), and then lists some four dozen such deals between 1988 and 2001, including 11 worth about $350 million that Mayor Rudolph Giuliani agreed to within the first 18 months of his administration.
A surprising number of tax breaks were given to companies supposedly threatening to leave New York that actually have “New York” in the title, such as the New York Times (two packages worth more than $45 million) and the New York Post (two packages for News America also worth about $45 million), as well as the New York Mercantile Exchange ($183.9 million), Mutual of New York ($5.7 million), the New York Board of Trade ($31 million), and the biggest of them all, the New York Stock Exchange, which was promised $940 million. That deal “eventually collapsed, buttaxpayers have still been stuck with bills totaling at least $145 million” Despite the hefty pay-outs, “the contracts typically do not require a company to repay the subsidies even if they have large-scale layoffs,” which several have had — nor even (in a couple of cases) if they wind up relocating.
“Mayor Bloomberg has been less profligate than Giuliani was,” LeRoy writes, ” in part, no doubt, because of the financial crisis he inherited, including so much tax revenue lost to ‘job retention’ deals.”
By Jonathan Mandell on October 15, 2005, 8:04 pmIn category: Land Use, Public Finance | No Comments »

