During the Cuomo-Hochul years, vast amounts of taxpayer dollars have been squandered on private-sector job investments.
Money has gone to initiatives that in many cases fell short of the job goals, while others did not set any benchmark for assessing their success or failure.
One flop was Cuomo’s 2013 “Start-up New York.” Over $50 million was spent on television and radio commercials to promote that program, which grants 10 years of no taxes to approved technology companies that locate in zones near state and City University campuses. The results were de minimis.
The program failed because the scope was too limited, there was no regulatory relief and interested companies had to endure a laborious application process.
But the biggest boondoggle of all has been—the heavily hyped “Buffalo Billion.”
In 2013, Gov. Andrew Cuomo proudly announced an investment to build plants in Western New York that would create at least 3,000 jobs.
The key participant in the project, Buffalo Solar City, controlled by Elon Musk, initially received $750 million in state subsidies and an additional $200 million in 2017.
An audit, performed by the office of State Comptroller Tom DiNapoli in 2019, revealed that the Musk project did not come close to meeting expectations.
To rationalize the faltering investment, the state approved amendments to the deal that reduced “the number of jobs required … as well as making it unclear what and where the remaining jobs will be.”
The dumbing down of the deal, the comptroller concluded, would result, at best, in a paltry economic benefit of 54 cents for every dollar spent.
A laid-off Solar City employee, Dale Witherell, insisted in a letter to U.S. Sen. Kirsten Gillibrand (D-NY) that “New York State taxpayers deserved more from a $750 million investment. Tesla, he added “had done a tremendous job providing smoke and mirrors and empty promises to the area.”
Since DiNapoli’s report was issued in 2020, there has not been any real progress.
A July 17, 2023 front-page expose in the Wall Street Journal titled “New York’s $1 Billion Bet on Tesla Isn’t Paying Off” explains just how bad a deal Cuomo cut with Musk.
Musk’s claim that his plant would produce over 1,000 solar panel shingles a week has fallen far short of that goal. “The company is installing on average only 21 solar installations a week,” the newspaper said.
The WSJ report noted “the suppliers that Cuomo predicted would flock to a modern manufacturing hub never showed up. The only new nearby business is a Tim Horton’s coffee shop.”
Democratic state Sen. Sean Ryan, whose district includes Buffalo, told the Journal “it was a bad deal. A cautionary tale is you can’t give governors too much power to get on the phone with egotistical billionaires.”
After inspecting the facility, Ryan sadly concluded that the activity “didn’t look like full-scale manufacturing work.”
The chairperson of the state Senate Finance Committee, Democrat Liz Krueger, was also shocked by the poor return on investment. She said we “should invest in infrastructure and job training instead of spending billions of tax dollars pretending we’re very good being angel investors.”
E.J. McMahon, of the Empire Center for Public Policy, summed up the Cuomo debacle thusly: “In building and equipping the Tesla solar panel plant, the state became an investor in that project under the worst possible terms. In terms of shared direct cost to taxpayers, this may rank as the biggest economic development boondoggle in American history.”
One can only hope that state officials finally learn that “Big brother” type government bureaucrats should not be the persons to dictate where entrepreneurs should locate and risk investment dollars.
If Gov. Hochul and her Democratic colleagues are serious about jump-starting New York’s economic engine, they will employ genuine incentives—tax cuts and regulatory reforms—that have created lasting middle-class jobs in flourishing states like Texas and Florida.