Rome, NY Sucks

But At Least We're Not Utica

Sunday, May 15, 2005

More Proof of the Stupidity of Paying Business to Create Jobs

I'm sure the Upstate Blog will be all over this, but I wanted to get my two cents in. Today's Post-Standard tells the disturbing tale of the Empire State Development Corp. and it's numerous failures with grants made to spur job creation.

Finding actual data is fairly elusive, as ESD now adds in jobs that they 'saved' ie. jobs that people already had. Their estimates are that they were responsible for 26,000 jobs at a price tag of $1400 per job. But with companies with thousands of existing workers, it could cost them up to $2000 a year per job created.

These grants are also handed out before the fact. If a company cuts workers, it may be fined. In the last year, only 46% of companies that failed job creation goals were penalized in any way. The largest sums are also going to large corporations that tend to be highly mobile and in search of a better deal.

Again, this becomes a regressive tax on the poor. Instead of cutting taxes for everyone, New York spends $200 million in tax money as practically no-strings giveaways in the hope it will defray the outrageous local taxes. With that money alone, the state could give a stipend of around $500 to every unemployed worker. I bet it would spur the economy a lot more that throwing it away at Oneida Limited or Ethan Allen.

At the end of the article, the ESD tries to point out the need to bribe business due to the state's high taxes. This is the problem. The more people pay in taxes, the more they need government services. The state raises taxes as it increases programs. Government is a leaky pipe. The more money you put into it, the more that disappears into the bureaucracy. Stop putting so much money through the pipe.


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