Issue of the Week
 
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Tax Breaks

THE LOWDOWN:

Critics call it corporate welfare. The City says it's economic development. The debate over tax exemptions is marked by lots of noise and few (but large) numbers. Big corporations are getting big breaks - millions, and even hundreds of millions of dollars to keep their businesses and accompanying jobs in the City (though it appears that some were not planning to leave in the first place). While critics are quick to point to Time Warner and the NYSE as examples of an ill-conceived policy, such cases are an imperfect representation. Thick reports issued by the City Economic Development Corporation documents 353 economic development projects with wide-ranging levels of City investment from FY 91 to FY 98. Further examination of such documents reveals the need for intelligent, informed reporting on the reams of figures produced by the City.

THE GIVERS:

NYC Department of Finance - Provides info on business taxes and exemptions, most notably the Industrial and Commercial Incentive Program (ICIP). The New York City Tax Benefit Guide describes abatements and exemptions available to residential and commercial property owners.

The 1998 Annual Report on Tax Expenditures (pdf file) - As per City mandate, the DOF has reported on the City's annual tax expenditures since 1990. Those expenditures, defined as "deviations from the basic tax structure which reduce taxes for specific taxpayers," totaled $451.6 M in 1998.

The Economic Development Corporation - Established as a merger of the Financial Services Corporation and the NYC Public Development Corporation. Its mission is to serve as a catalyst for public and private initiatives and generate revenue for the City. The site features a brief overview of EDC's myriad incentive programs, everything from energy to business advice to import/export help.

The Department of Business Services - BIDs, incentive programs, neighborhood development and more.

The Downtown Alliance - Describes the "aggressive tax incentives" for downtown tenants and landlords. Scroll down for the Lower Manhattan Economic Revitalization Plan, which details the various tax abatements and exemptions for commercial, residential and mixed-use properties. The "Plug'n'Go" program promotes smart buildings to new media companies in Lower Manhattan.

THE TAKERS:

Brooklyn Navy Yard, - As usual, the Observer dishes the deal at the Hollywoodization of the Navy Yards, while the official EDC version is less specific about the figures.

Time Warner - Details on the 1998 deal struck by Time Warner and the City for a coveted spot at Columbus Circle.

"City's Bullish on Bear Stearns" - Daily News describes Bear Stearns' relocation to Madison Avenue, to the tune of $75M in state and city sales tax breaks.

Steinway & Sons - Lest the Mayor be accused of granting tax breaks to corporate fat cats, his administration has recently agreed to $4.2M in land tax abatements for Steinway & Sons. The deal permits Steinway to renovate its venerable factory in Long Island City.

THE FIGURES:

Local Law 69 - The text of this law requires specific reporting from those businesses receiving abatements or exemptions through the EDC. The information collected is then disseminated through the Local Law 69 Report, published by the Economic Development Corporation.

THE CRITICS:

Elizabeth Lynam from the Citizens Budget Commission explains why tax expenditures are corporate giveaways.

"Need A Handout? Be a Corporation" - Daily News' Jim Dwyer says its easier to get money as a corporation than as a down and out veteran in this town.


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