The Amazon Deal and Budgets as Statements of Policy Priorities

Our discussion in recent weeks of public budgets has highlighted the role they play as firm statements of an administration’s policy priorities. No longer are elected leaders simply making campaign promises or nice-sounding public statements about how important every issue is; when it comes to putting together a budget, they have to put real money behind their statements. Not only that, but they have to make some tough decisions between competing priorities given the budget constraints within which they are working. The budgets they propose are a clear way of telling constituents which issues they will put first when push comes to shove.

This perspective on budgets is telling as a lens for considering the deal Governor Cuomo and Mayor De Blasio recently struck with Amazon to build a new headquarters in Long Island City. After a nationwide search in which cities competed to offer the megacorporation the largest package of incentives to choose them, Amazon decided to split their second headquarters between Washington, D.C. and New York City. New York State and New York City together are offering Amazon in subsidies and tax breaks.

Supporters of this deal, including Cuomo and De Blasio, argue that this will be a major economic development boon for the city. As a recent New York Post op-ed points out, the majority of the subsidies for Amazon are contingent on them creating local jobs, not to mention the construction jobs that will be created by building the new headquarters itself. The article also points out that it wasn’t just these financial incentives that drew Amazon to NYC – they were attracted by the pre-existing technology ecosystem and highly skilled workforce.

Opponents of the deal say that this is exactly the point: chances are that Amazon would have picked New York City regardless of the financial incentives offered to them, because this is one of the few cities with enough concentration of workers with the skills they need. So why give away $3 billion of city and state tax dollars to a corporation that itself made more than $3 billion in profit last year?

If the various public needs of New York City were being met and there was an excess of public funding, that would be one thing. But it is widely agreed that the city already has a myriad unmet needs: our public housing is crumbling, 22,500 children slept in our homeless shelters at our most recent count, the subway system has decades’ worth of backlogged repairs. In fact, the increased activity Amazon promises to create will only increase the pressure on the city’s infrastructure.

As New School economist James Parrott says in a recent The Nation article, “With the best economy [in the city] that we have had in five or six decades, why are we spending a dime on economic development?” The governor and mayor’s choices to allocate such a significant amount of money to this one deal is a sure indication of where their priorities lie. The public debate in the weeks since the deal was announced indicates that a significant number of New Yorkers agree that this is not the policy priority they would like their public budgets to reflect.

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