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State subsidies should be scrutinized

Last week, six reform groups signed on to a letter calling for the state Senate’s Finance Committee to hold a hearing on the “effectiveness of business subsidies and tax incentives in New York state.”

“We believe that such a hearing would shine a light on the roughly $10 billion New York State and local governments spend on economic development every year, and help the public understand whether their tax dollars are being well spent,” the letter, signed by Reinvent Albany Executive Director John Kaehny, among others, reads.

We’re reminded of this letter as news continues to roll in about state funding for local projects.

Last week, Tupper Lake secured a $10 million Downtown Revitalization Initiative award. Local officials hosted a groundbreaking ceremony at the Saranac Lake Civic Center on Monday — an expansion project the state has promised to contribute $4.5 million toward. On Tuesday, Gov. Kathy Hochul announced more winners in the state’s annual Regional Economic Development Council awards, including multiple Tri-Lakes area municipalities and organizations. The REDC awards directs hundreds of millions of taxpayers’ dollars — plus tax incentives — to both public and private projects each year.

On one hand, there’s reason to celebrate. The Saranac Lake Civic Center project will benefit not just the athletes participating in the 2023 World University Games but everyone who uses the space for years to come. Tupper Lake’s $10 million DRI could go a long way in transforming the village. The Adirondack Mountain Club, in Lake Placid, clinched $500,000 through the REDC awards toward its purchase of the Cascade Cross Country Ski Center — part of ADK’s plan is to flip miles of cross country trails from private to public use, and open up the trails to the public for hiking, too. The club also plans to use the new space as an education center, something sorely needed as the High Peaks sees more and more hiker traffic each year. Historic Saranac Lake got a $500,000 REDC award to rehabilitate the former home and medical practice of Dr. Edward Livingston Trudeau, money that will go a long way in helping HSL to preserve and showcase this special piece of our history.

On the other hand, the questions of why taxpayers are paying for some of the projects the state has agreed to commit funding to, and what taxpayers are actually getting in return, are valid ones. In the past, the state has funded some projects because they would theoretically create jobs and spur economic development, but is there enough evidence that that’s what actually happened after the money was spent?

“The overwhelming majority of studies by independent scholars have found that business subsidies are not an effective use of public funds,” the reform group’s letter says. “New Yorkers deserve to know whether ‘economic development’ spending is a good investment of public funds compared to traditional government investment in public infrastructure and education.”

As state legislators prepare to start budget talks, we hope lawmakers will seriously consider whether the state’s current system of doling out subsidies and tax incentives is working.

At the very least, taxpayers deserve a more transparent system.

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