Each year, New York state spends approximately $7 billion on economic development in the name of job creation. Amazingly, the Legislature and the public often have no idea how this massive amount of money is actually spent.
A lot of this spending is off-budget, in the form of tax exemptions and tax-exempt bond financing to businesses that promise to create or retain jobs.
We don't have public records of exactly which companies got exactly which subsidies, and we don't always have information to share with taxpayers about whether the "job creation" programs they fund have actually created jobs.
Gov. Andrew Cuomo has worked in recent years to make sure the programs he has established — the Excelsior Jobs Program, the Regional Economic Development Councils, and Start-Up NY — include performance, accountability and transparency standards.
But older economic development programs that cost us billions every year don't have these simple, clear standards.
That is why we've introduced the Just and Open Business Subsidies Act. Our bill would institute common-sense reforms in all economic development programs:
Requiring subsidized companies to set clear job-creation goals;
Annual reporting with information accessible to the public;
A "claw back" provision — a money-back guarantee so public money is returned if subsidized companies don't deliver on their agreements.
When so many communities continue to struggle with unemployment, budget deficits and the difficult decisions that come with them, we've got to maximize the impact of economic development. We can't afford anything other than smart investments that protect taxpayers' money and get results.
It's time to end boondoggles like the subsidies the company VWR received to shift jobs from one part of the state to another: VWR got nearly $500,000 in public money to expand a warehouse in Monroe County and create four new jobs. In the process, VWR closed its warehouse in Erie County and cut 104 jobs. Because the subsidies VWR received did not include basic accountability mechanisms, taxpayers can't recover any of the money. It's time to change that.
This legislation has received support from Democrats and Republicans, as well as from community, labor, business and faith groups around the state. Spending tax dollars in government programs carefully is something everyone can get behind.
Jobs and the economy are often ranked in polls among the very top concerns of New Yorkers; if we're going to keep spending billions in the name of job creation, the JOBS Act will make sure we get our money's worth.
Diane Savino is a Democratic state senator from Staten Island. Sean Ryan is a Democratic assemblyman from Buffalo.