Has anyone noticed the recent media blitz by the Empire State Development Corporation at taxpayers expense. The commercials run in heavy rotation several times per hour on many television stations. They have a catchy beat reminiscent of Bobby McFarins “Don’t Worry, Be Happy.”
The costs rival major media buys from candidates running for public office. These frequent television ads have been running for weeks and have now spread to newspapers.
How many hundreds of thousands of dollars are being spent on these feel good ads promoting “Big Things Happen Here in New York State.” They claim that NYS is open for business. It makes no sense to run them in New York markets. We continue to face a 8 percent unemployment rate along with 7 percent who have given up looking and millions more working part time and/or at minimum wage while looking for full-time work and higher salaries.
This media onslaught has done nothing to promote real job growth. Only the employees who work for the advertising company who produced and placed the media buys on television stations and in newspapers benefited. Small, medium and large size companies based in New York can see beyond the smoke and mirrors. They are more likely to downsize than hire new employees in today’s economic environment. The net loss of jobs and businesses leaving is greater than what has been created in New York. Our local businesses know that the problem is right in our own backyard. New York State is ranked as one of the most unfriendly states to conduct business in. This is due to excessive rules, regulations and confiscatory taxation levels. These television commercials and newspaper ads should have been running out of state. Maybe they could have conned some naive investors to consider buying the Brooklyn Bridge.
New York State prospered and successfully grew prior to creation of the Urban Development Corporation in 1968 which conducts business under the Empire State Development Corporation. Buried within the Empire State Development Corporation are almost 100 active subsidiaries and perhaps an equal number of inactive subsidiaries. Audits by various state comptrollers over the years have questioned the level of oversight over both active and inactive subsidiary corporations.
It has become politically fashionable for local county and cities to have their own local development corporations. Many of these entities also serve as a vehicle to provide political patronage positions for the loyal supporters of elected officials controlling them. Don’t forget the army of consultants that economic development corporations hire to provide so called technical assistance and expertise to create and manage projects and programs. In many instances, projects supported by these government corporations have been heavily subsidized by taxpayers, commonly known as corporate welfare. Between direct government funding, low interest below market rate loans, long-term tax exemptions, favorable eminent domain and free infrastructure improvements, the bill to taxpayers in the end is greater than the so-called public benefits.
There is also a relationship between Pay for Play campaign contributions from developers to elected officials looking for favorable legislation, private property condemnation under eminent domain, building permits, public infrastructure improvements, along with direct and hidden subsidies. In some cases, state, city and county development corporations actually compete against each other attempting to outbid each other in offering potential investors the best deal. This translates to the highest subsidies at taxpayers expense.
Don’t forget the conflict of interest for senior staff from state regulatory and permitting agencies. Too many leave in the twilight of any state administration to become employees or consultants to the same developers they previously oversaw. Some developers try to purchase the support of local community groups by making so-called voluntary donations. They also make promises for capital improvements, which after the major project is completed don’t always appear. Other commitments for creation of permanent new jobs and tax revenues frequently do not meet expectations.
If these projects are worthwhile, why can’t major developers use their own funds or obtain loans from banks, like medium and small businesses?
Real business people who believe in capitalism build their companies on their own. How sad that some don’t want to do it the old fashion way by sweat and hard work. They are looking for shortcuts in the form of huge subsidies at taxpayers expense and favors from elected officials.