Skoufis, Krueger, Ryan announce results of tax incentives audit, propose package of 'pro-taxpayer reforms'

Press Release

New York State Sen. James Skoufis (D, 42nd District), Liz Krueger (D, 28th District) and Sean Ryan (D, 61st District) have announced the completion and public release of a long-awaited, independent audit of New York state tax incentives. Twenty-five tax credits and economic development programs were studied across various industries, including entertainment, real estate and land use, employment and investment and labor.

See the audit here.

The senators, alongside their conference, successfully negotiated a provision into the 2022-23 budget to conduct a first-of-its-kind, comprehensive audit of the state’s major taxpayer-funded incentives and corporate subsidies. The 359-page report highlights which programs provide a strong return on investment to taxpayers, as well as those that return as little as 2 cents to taxpayers for every dollar the state invests (Empire State Musical and Theatrical Production Credit).

In light of the audit’s findings, Skoufis, Krueger and Ryan are proposing a host of reforms that include bolstering the programs that work, eliminating many of the incentives that continue to fail taxpayers, and enacting guardrails and transparency where needed.

“This audit is not a wholesale indictment of all economic incentive programs,” Skoufis said. “It is exactly what I hoped it would be: a comprehensive, objective examination of taxpayer-funded incentives and corporate subsidies. In the thick of budget negotiations, this is the moment for hard conversations about New York’s true financial picture. With so many in my district struggling with the cost-of-living crisis, now is the time to reevaluate these incentives and weed out the corporate giveaways that serve no one but the beneficiaries who use our money to pad their pockets. I am proud to have championed this audit and now we must act to protect New York’s taxpayers.”

Krueger said, “This groundbreaking audit is just the tip of the iceberg in terms of the information we should have on economic development spending in our state, and yet it has the potential to change the conversation around how we balance our budget. We simply should not be wasting taxpayer money on programs that do not provide a fiscal or other benefit to New Yorkers, or those that make grand promises of jobs but serve only to line the pockets of a small number of individuals. I look forward to working with my colleagues on the next steps to build on this information.”

Ryan said, "New York needs a more transparent economic development system, and we need a system with better oversight – one that easily adjusts to what works and what doesn't work. At times in our state's past, an attitude of 'That's the way we've always done it' has resulted in inefficient spending and investments made without regard to return on investment. It is imperative that we ensure our taxpayer dollars are not being wasted on ineffective programs. This independent analysis of New York's tax incentives provides us with a useful tool to help assess the difference between successful economic development and wasteful business subsidies."

Ron Deutsch, director of New Yorkers for Fiscal Fairness and senior policy fellow at Reinvent Albany said, "The PFM Group's report confirms what countless independent academic studies have suggested over the past three decades: Businesses overpromise and underdeliver on job creation, and provide a pitiful return on investment. Taxpayers have been funding these failed subsidies for far too long. It's time we stop letting the state and local authorities give away our tax dollars to corporations for jobs they would have likely created anyway.”

Michael Kink, executive director of the Strong Economy for All Coalition, said, "This new report demonstrates that there's not a single so-called 'economic development' program that provides a greater return on investment than early childhood education or public health initiatives. It also demonstrates that there's no actual proof that the billions of dollars we spend on so-called 'economic development' programs actually create the jobs that are subsidized. That proves we should end these controversial corporate subsidies and invest in public goods and public services instead."