New York State is deeply blue. That’s the color mapmakers use to show Democratic control. That’s also the state the state’s economy is in, depressed by those same Democrats’ policies.
So, to lighten the mood, Governor Andrew Cuomo is splurging $140 million tax dollars for TV ads that sing the praises of the state’s supposedly brand new pro-business attitude to folks way down here in Virginia (where I live) and all across the country.
One spot features actor Robert DeNiro acknowledging that “some say we lost our edge,” but then claiming, “Well, today there’s a new New York State, one that’s working to attract businesses and create jobs . . . nurture start-ups and small businesses . . . reduce tax burdens . . .”
“The new New York works for business,” the ad concludes.
The old New York Times reports “the governor and lawmakers are” funding the campaign by “draining money from ostensibly independent public authorities for purposes running counter to their missions” — something “common” in state government.
A whopping $50 million came from the State Power Authority, which was established to produce electricity cheaper and lower energy bills in the state. Audaciously, folks at the Authority claimed, in public filings, that the resultant economic development spurred by the ads would serve their mission.
Millions more has been “raided,” according to former Democratic Assemblyman Richard Brodsky, from state authorities that “should be lowering electric rates, building dormitories and otherwise doing what they were created to do.”
Ironically, Empire State politicians are lawlessly taking money away from its mandated statutory purpose, so they can spend it to crow to out-of-state companies about how wonderfully governed New York State is.
Alas, out-of-state smirking is nowhere near as satisfying as it should be. You are also a contributor, dear non-New York reader: the ad campaign taps a fat $40 million in federal government disaster relief funds “to promote businesses and tourism in the areas struck by Hurricane Sandy.”
Of course, New York is hardly alone. Others states are also spending gobs of tax dollars to attract new business enterprises — for instance, Connecticut is spending $27 million, California $50 million and Michigan $25 million.
Gov. Cuomo told The Times, “By telling the stories of businesses that are already succeeding in our state, we can attract even more economic opportunity and jobs.” So what are these “successes”?
- Taxpayers handing Fage Yogurt $1.5 million in state incentives to build a factory in Johnstown.
- Taxpayers providing $3.4 million to help Smith Electric Vehicles build a factory.
- Taxpayers forking over $40 million to assist BAE Systems, which was hurt by flooding back in 2011.
The problem with the TV spots? “New York’s business climate still isn’t competitive enough, in any objective sense of the word, for an ad to overcome,” says Andrew Rudnick, chief executive of a trade group, the Buffalo Niagara Partnership.
Worse still, as much as New York politicians recognize they’ve created an environment that businesses want to move away from — the state’s taxes are the least business friendly in the union — their focus isn’t on reversing the rotten business climate. Instead, they cut insider deals as if crony capitalism is the answer.
So, the very same politicians droning on incessantly about income inequality also promote a new economy where the government in all its largesse lifts a few new boats, while most boats, taxed to foot the bill, remain weighed down and anchored to the harbor mud.
In fact, the latest twist is an ad campaign touting a new program whereby some new or expanded businesses and some new employees don’t have to pay any state and local income taxes at all.
While the rest of New Yorkers keep on paying and paying.
It’s only fair.
The program is called Start-Up NY and it offers qualifying new and expanding outfits that partner with the SUNY system (the twelve State University of New York campuses across the state) a decade of no taxation. That’s the “new plan” — even newer than the “new New York” proclaimed by the previous ads. The Start-Up NY 30-second spot then unequivocally exclaims, “Dozens of tax-free zones all across the state. Move here, expand here or start a new business here and pay no taxes for ten years!”
Wow. No taxes. Sounds good.
But how will the state afford to deliver government services to these special tax-free companies? Who will pay their share?
Likewise, the employees of these new or expanded enterprises will not have to pay taxes. Will they not drive on state and local roads? Or check out any books from the library? Or send their children to public schools?
In the new New York envisioned by Cuomo and Company, some people and some businesses that have long suffered under the state’s onerous tax-and-regulation yoke, unable to escape, will continue to suffer and struggle — but even more so to purchase services for the new government-favored enterprises.
Just as Mr. Orwell explained, everyone in New York State will continue to be equal, but those in tight with state government will be more equal.
June 23, 2014
This column first appeared at Townhall.com.