For Immediate Release Tuesday, February 13, 2001

City Development Agency Receives Valentine's Day Cards Community-labor coalition cites need to end "sweetheart deals" for companies with clout, and asks "IDA, won't you be mine?"

Members of the board of the Industrial Development Agency (IDA) received unexpected Valentine's Day cards as they entered 110 William Street for their monthly meeting. In a new twist on the holiday message, these cards requested "No More Sweetheart Deals." IDA is the city agency that distributes tax breaks and tax-exempt bond financing to companies as incentives to keep them in the City when they threaten to relocate, typically to New Jersey. The cards were delivered by members of the Alliance for a Working Economy, a coalition of New York City unions, community organizations and advocacy groups. Alliance members courted IDA board members, saying "IDA, won't you be mine?" and asking them to preserve public resources for things like public transportation, teachers, and housing, "investments that improve the quality of life for all businesses and city residents" read the card.

The Valentine note to IDA board members read, "High-profile companies have won enormous public subsidies from your agency, to the tune of over $2 billion since the late 1980s. The tax breaks you grant mean less money for the things we really need to make this a better city in which to live and do business. If you cut back your gifts to companies who don't need them, we can start to make real investments in our future together!" The card's cover named a number of companies that had received "retention" subsidies. Many of these companies had made questionable threats to leave the City, and at least two of them, Bear Stearns and CBS, were never at risk of leaving the city according to public statements by executives at the companies.

Alliance member Julie Carlson, co-director of the Human Rights Project at the Urban Justice Center, said, "These sweetheart deals go to companies with huge profits and access to the Mayor - often to companies that never needed the subsidies to keep jobs in the city. Our constituency is struggling to put food on the table. They need real job creation, not corporate welfare. As it stands now, the more money you have, the more you get from the government."

The IDA board of directors is composed of 15 members. Eleven are appointed by the mayor (five on the recommendation of each of the borough presidents) and four are "ex officio" members (on the board because of the public office they hold). Only one of the IDA board members, the City Comptroller who is an ex officio member, is an elected official. This city agency has the power to reduce corporate tax revenues to the city by hundreds of millions of dollars every year. Even though the IDA is effectively implementing tax policy for New York City, there is no role for the City Council to approve or even comment on these tax breaks. "There needs to be much greater accountability to the New Yorkers who pay for these deals" says Alice Meaker, director of Good Jobs New York, a joint project of the Fiscal Policy Institute and Good Jobs First that seeks to ensure greater accountability in the use of economic development subsidies.

In the near future, Mayor Giuliani will ask the IDA board to approve subsidies for the New York Stock Exchange, which will cost the city about $900 million (another $225 million will come from the State budget). Meaker has questioned the extensive use of public money for a new trading floor for the New York Stock Exchange. The profits of New York Stock Exchange member firms will total $20 billion for the year 2000, according to the Securities Industry Association. "Clearly the New York Stock Exchange and its member firms can pay for this project without public assistance," says Meaker. Information on the NYSE deal and other major corporate retention deals is available on the Good Jobs New York website, at www.goodjobsny.org.

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The Alliance for a Working Economy is a coalition of New York City unions, community organizations and advocacy groups that initially formed to win passage of this year's Transitional Jobs Bill. The coalition's continuing work is to promote the effective use of public resources for the creation of living-wage jobs for New York City residents. AWE's Corporate and Government accountability campaign seeks to eliminate wasteful public expenditures on unnecessary corporate subsidies.

Updated February 14, 2001