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Bill would ban Amazon-type deals in the future

Posted by Karen DeWitt on

A week after the Amazon deal in Queens died, New York lawmakers want states to agree to stop using taxpayer money to lure big businesses.

The legislators are proposing a measure that would form an interstate compact to end what they call excessive “corporate welfare” for large companies.

Among the sponsors is Senate Deputy Majority Leader Mike Gianaris, a leading opponent of the Amazon deal. It would have located part of a second headquarters for the giant online retailer in his district, in exchange for $3 billion dollars in government subsidies. Gianaris admits that there are differences of opinion whether Amazon would have been a good addition to New York. But he says there’s growing agreement that the competition among states, which included private meetings between the company, Governor Andrew Cuomo and the New York City Mayor Bill de Blasio to finalize the deal, was the wrong way to go.

“The process that pitted cities and states against each other to acquire Amazon’s good graces was flawed and should not have been permitted,” Gianaris said.

Among those who criticized the process are former New York City Mayor Michael Blomberg, and Microsoft chief Bill Gates.

Amazon is also building a new headquarters in suburban Virginia, outside Washington, and is receiving around one-quarter of the subsidies offered by New York State and New York City.

Gianaris says European nations prevent companies from conducting similar competitions there, and he says in the US, states can agree not to participate either, in a “non-aggression pact”

So far, eleven states have expressed interest in joining, including neighboring Connecticut and Massachusetts.

The Amazon deal fell apart on February 14, after local opposition from some community leaders and lawmakers who represent the district threatened to delay the project. The area, which is bordered by Congresswoman Alexandria Ocasio-Cortez’s district, who won an upset victory last June, has increasingly leaned left in recent election cycles. She was also against the deal.  Opponents wanted the company to receive fewer government subsidies, and do more to alleviate crowded schools and subways and rising housing costs that they say the move would have created.

Senator Gianaris was appointed by Senate Leader Andrea Stewart –Cousins to a key oversight board that could approve or reject part of the Amazon deal, an action that was said to have rattled the company.

Other supporters of the interstate compact to ban large corporate subsidies include Queens Assemblyman Ron Kim and state Senator Julia Salazar, who is the bill’s original sponsor. Salazar won her Brooklyn seat in a primary against a member of the former Independent Democratic Conference, a group of breakaway Democrats who often sided with the Republicans then in power in the state Senate. Salazar, a democratic socialist, says there’s been a “disturbing trend” in the past few decades of governments pulling away from investment in affordable housing, infrastructure and even financial aid for college, in favor of aiding big businesses.    

“It’s about taking power from those who have had it taken from them,” Salazar said. “We’re no longer going to compete in a race to the bottom.”

When Amazon backed out, Governor Cuomo blamed  Democratic state senators, including Gianaris and Salazar,  saying their opposition prevented the City from gaining 25,000 high paying jobs and potentially billions of dollars in new tax revenue.  

New York City Mayor Bill de Blasio, who partnered with Cuomo on the deal, blamed Amazon for the failure, saying the company was inflexible.

A senior advisor to Governor Cuomo, when asked for reaction to the measure, did not address the substance of the bill, but called the Democratic Senators’ actions “theatrics”.

Advisor Rich Azzopardi says the governor remains focused on increasing New York’s competitive edge by   “ cutting taxes, creating jobs and making New York more affordable”.

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