Study: NYC Corporate Retention Deals Lose Jobs 2/5/2004
From: Bettina Damiani for Good Jobs New York, 212-414-9394 or 347-432-0315 (cell) NEW YORK, Feb. 5 -- Good Jobs New York today released a report that finds New York City's costly corporate retention policy is failing to retain or create jobs. The report, Know When to Fold `Em: Time to Walk Away From NYC's "Corporate Retention" Game is based upon an analysis of contracts never before disclosed between the city and 13 large corporations; it is available at http://www.goodjobsny.org. Despite the failed policy, the City is considering $42 million in tax breaks for Bank of America; a public hearing on the deal will take place 10 a.m. Thursday, February 5 at the New York City Industrial Development Agency (IDA), 110 William Street in Manhattan. Analyzing 13 of the biggest -- and heretofore secret -- deals, GJNY found that the agreements actually allow firms to lay off up to 20 percent of their workers before triggering any real penalties. "Our report finally sheds light on a process that allows some of the world's wealthiest corporations to take money from taxpayers and then pay back residents and employees with layoffs," said Bettina Damiani, Project Director of GJNY. Report highlights include: -- All agreements GJNY examined had "employment cushions" allowing companies to lay off workers without having the subsidy cancelled. -- Many agreements contain "low-balled" job retention targets set below the number of jobs companies had at the time they signed their deals. -- Only one subsidized company that GJNY studied paid the city back when it moved its operations out of New York City. -- Public reporting on the outcomes of these deals provides data that is inconsistent with internal IDA reporting documents, making it impossible to evaluate the success or failure of individual deals. Massive economic development tax breaks to corporations and developers under the guise of creating jobs must be re-examined, the report states. The study details reforms the city can adopt to do a better job of ensuring that taxpayers get the best bang for the buck. Editor's note: GJNY is a joint project of the Fiscal Policy Institute (FPI) and Good Jobs First (GJF). FPI is a nonpartisan research and education organization based in New York City. GJF is a non-partisan research center promoting best practices in economic development based in Washington, DC. |