April 10, 2022

Hochul’s First Budget Rewards Unions at Taxpayers’ Expense — and Sets the State on the Road to Insolvency

(nypost.com)

New Yorkers are aghast that the Buffalo Bills stadium deal, which will fill the pockets of a wealthy NFL team owner with their tax dollars, is in the state budget the Legislature just adopted.

But it’s not exactly a rogue element.

The stadium giveaway is really a metaphor for the entire $220 billion package, whose defining feature — other than its enormous price tag — is the degree to which it’s packed with subsidies for well-heeled business interests and big labor unions.

No doubt the stadium deal is a useful Exhibit A. Economists on both the right and left agree taxpayers are typically the losers in such publicly funded sports-stadium arrangements.

We can’t know for sure if a harder bargain would’ve sent the team packing. But even if it had, residents wouldn’t necessarily have lost. Most spending that now goes toward Bills games would have been redirected to other forms of local entertainment. The team’s wealthy owners, the Pegula family, are among the few clear winners in this deal.

It’s the same story with most of the budget’s economic-development spending and business tax credits (some of which are just disguised spending). The budget extends all the way through 2029 the film-production tax credit (which was set to expire in 2026) that bestows nearly a half-billion dollars of taxpayer funds annually on studios that film in New York — beneficiaries include wealthy Hollywood producers. The budget also kowtows to software lobbyists by creating a “digital gaming media production credit” for the video-game industry.

Like the stadium deal, these tax credits don’t add jobs — they allow Albany politicians to reallocate them by deciding which industries will succeed and which will fail, substituting political calculus for the market’s invisible hand. This is not a winning formula, as evidenced by the state’s anemic post-pandemic jobs recovery, which lags that of nearly every other state.

By: Peter Warren

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