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Economic Development on Common Ground: Two Bipartisan State Policies for Defunding Low Road Infrastructure

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[Excerpt] On the backdrop of civil unrest and the nation’s politically discordant handling of COVID-19, these alarming figures bode poorly for the prospects of overcoming partisan gridlock to pass progressive, High Road legislation. At face value, members of opposing political parties seem too unwilling to cede any ground to their rivals to come together to enact meaningful change. To be sure, lawmaking bodies are even unable to agree that a global pandemic, which has thus far killed over 125,000 Americans and left tens of millions jobless, demands additional government intervention. Nevertheless, there is at least one domain where the two sides of the political divide appear to share common ground. Organizations and authors from right-leaning free market think tanks like the Mercatus Center to the left-leaning Good Jobs First have made the case to end targeted economic development subsidies and tax incentives. The next section explores the rationale for this position. From there, the memo highlights two opportunities to reform – and ultimately phase out – economic development incentives in New York State. Both opportunities were introduced to the New York State Assembly in the 2019-20 legislative session. Thus, the legislation already exists and does not need to be drafted anew. The bills are available to be reported out of committee and put to a vote (or, since the session has ended, reintroduced in 2020-21 and then reported out of committee for a full Chamber vote). They accordingly represent near-to medium-term actions that the State legislature can take to wind down and then end a practice that, as detailed below, is roundly derided across the political spectrum. Finally, the memo concludes with an even more immediate policy target: a federal COVID-19 relief package for state and local governments that might help end the “interstate economic development arms race.”

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economic development; subsidies; tax incentives; economic policy reform; interstate compact


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