In a bit of “economic development” that reeks of something rotten, Gov. Kathy Hochul’s arranged for New York taxpayers to cover $2.2 million of the $3 million cost of expanding the downtown corporate offices of Manhattan Telecommunications Inc.
Fine: Officially it’s not cash, “just” $2.2 million in tax credits via the Empire State Development Corp., the state’s main avenue for corporate welfare.
Then again, the telecom-services firm built its business on working the halls of government: It got its start a quarter-century ago, Forbes reported, with $2 billion in federal contracts from the Veterans Administration, State Department and General Services Administration.
And MetTel’s current annual revenue is around $313 million, so it surely could’ve afforded to cover more than 27% of the expansion cost.
Fine, the deal supposedly commits the company to “creating” 100 jobs in the city while retaining 180 others, instead of relocating the HQ to Florida as it apparently threatened.
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So what? The state can’t bribe more than a fraction of the firms now eyeing the Sunshine State — at least not without even more punitive taxes on anyone who can’t leave.
“A $3 million ‘investment’ that requires $2.2 million in subsidies is by definition either a bad investment, or a venture that doesn’t need government subsidies in the first place,” notes the Manhattan Institute’s E.J. McMahon.
Deals for the well-connected aren’t the only reason New York’s finances are headed down the tubes, with $36 billion in deficits these next three years.
But state leadership that puts scratching backs far ahead of building a decent business climate pretty much defines the Empire State’s road to self-destruction.
