The state Thruway Authority's lawyer fielded a phone call Wednesday from one of the honchos in Attorney General Andrew Cuomo's office, informing her that the free, lifetime E-ZPasses granted board members are a no-no. Commissioners are supposed to serve without compensation and the E-ZPass is, well, a form of compensation.
"Commissioners are far from the only ones enjoying free passes ... 4,193 current and retired authority employees -- including those who work for a subsidiary that operates the Erie Canal system, and state troopers who police the Thruway -- also receive lifetime passes."
The New York Daily News has been doing some interesting stuff on the free passes granted some 60 current and former board members -- including three dead ones -- of the Metropolitan Transportation Authority. Those passes have major currency, giving holders, among other things, free trips through tunnels that cost everyone else up to $8. The MTA originally told Cuomo's people to take a hike. It backed off a bit Thursday afternoon, revoking passes for retired board members and placing restrictions on the use of passes for current commissioners.
I had occasion to visit LaSalle Park the other day and was aghast at the conditions, as documented Wednesday afternoon by my colleague, Derek Gee.
Here it is, after Memorial Day, and the grass along the waterfront pathway looks like it has yet to be cut this year. The road at the far end of the park looks like al Qaeda has been using it to practice setting off roadside bombs. Broken glass from a shattered windshield littered another patch of road.
In short, a mess.
Most cities would kill to have a park like this. Great waterfront vista. Lots of green space. Minutes from downtown.
The Olmsted park system is considered the jewel, but LaSalle's location and potential are hard to beat. The Masiello administration developed a plan to revitalize the park about five years ago. It's been collecting dust since.
Buffalo Rising took note of the conditions a couple of weeks ago. Now I'm chiming in.
Note to Erie County Executive Chris Collins, county legislators and their parks department: Perhaps you should send someone over with a lawn mover. Conditions don't reflect well on your stewardship of city parks.
And City Hall, perhaps the road should make its way into your capital improvement plan.
A century ago, the site was used as a dumping ground. It shouldn't look that way today.
I was in New York City over the weekend and took in a game at Yankee Stadium. The new ballpark is going up across the street and looks impressive. I was one of the many Yankee fans (OK, I realize that phrase just cost me with some readers), opposed to abandoning the stadium- hallowed ground, such as it is - but watching three games over the past two years has sobered me to the shortcomings of the ballpark. In a lot of ways, it is grimy and outdated.
Just what does all this have to do with a blog about subsidies? Plenty.
The new Yankee Stadium is going to cost $1.3 billion. Yes, billion. That's more than the price tag of program to renovate Buffalo's public schools - with four-hundred-million left over.
Now, if this was George Steinbrenner's money, who cares? But the stadium is highly subsidized.
The politic ans who put the deal together put the subsidy figure at $400 million. Good Jobs First of New York has calculated the cost at nearly $800 million. The city, state and feds are all kicking in. Here's a report and another report detailing the history of the project.
Public costs continue to climb. The new stadium is being built on public park land and The New York Times recently reported:
"The price of the new small parks — which are to replace tennis and basketball courts, a running track and baseball and soccer fields eliminated to make way for the new stadium — is now projected to be $174 million, almost one-seventh the cost of the $1.3 billion stadium itself. The original estimate had been $95.5 million."
If you're interested in what the new stadium is looking like, a blog called Sliding Into Home has these photos.
Vetting the city's annual operating budget, and, to a lesser degree, the federal block grant budget, are among the major responsibilities of a Council member. After all, money is what drives city operations.
This year, however, the Council all but rubber-stamped both budgets. It's becoming a trend.
The Council changed Brown's proposed $435 million operating budget by $653,456. That's less than 1 percent -- 0.15 of 1 percent to be exact. Last year, the Council changed the budget by 0.22 of 1 percent.
The Council this year gave the mayor the budget he wanted largely in exchange for a small boost -- from $75,000 to $110,000 -- in what each member can spend in his district at his discretion. In other words, a little more pork.
One could argue that there was a lot to like in this year's proposed operating budget. More cops. Lower property taxes. Pretty safe, politically.
I've pointed out in previous posts, however, that the Brown administration's budgeting strategy relies on continuing increases in state aid to balance the books. There's no effort being made to close a huge structural budget deficit.
Shouldn't that strategy be worthy of debate? By not only the Council, but the Control Board? It's the elephant in the room, if decision makers want to acknowledge it or not.
Then there's the block grant budget. I did an investigation in 2004 detailing how the city had squandered more than a half-billion dollars in federal block grant funds, going back to the days of Jimmy Griffin. Too little spent in the poor neighborhoods the program is intended to help, too much on the salaries of bureaucrats and the follies of ill-fated projects of developers with political connections.
It's still going on. Steve Banko, whose local HUD office oversees the city's use of block grant funds, fussed in an Artvoice story a couple of weeks ago that little has changed under Brown.
Reported Artvoice:
"What bothers Banko ... isn’t just that the city administers its block grants so poorly, it’s that it tries to be sneaky about it."
Where is the Council in all this? Demanding change? Insisting that money be put to use in smart ways in the neighborhoods they represent?
Nope. They're approving what Brown puts in front of them.
This year, the Council changed the mayor's proposed $23.8 million block grant budget by $250,000. That's 1 percent. More than the rate of change with the operating budget, but still infinitesimal, especially considering the block grant program's continuing problems.
Almost lost in the news last week about the huge hydopower allocation to Globe Metals to reopen its Niagara Falls plant was the awarding of cheap electrity to three other Niagara Falls companies.
Keep in mind that the discount per job averaged about $4,200 when I calucated it a year ago, and that allocations made since January 2006 have leveraged about $14,000 in private investment per kilowatt.
Here are the new allocations approved by the New York Power Authority's governing board last week:
Saint-Gobain Cermaics, already one of the larger cheap hydropower recipients, got an extra 700 KW. The company says it will use the power to expand its plant, investing $5.8 million and adding 14 jobs.
Annual energy savings: $276,105 (all calculations are mine)
Cost per job: $19,722
Investment per KW: $8,286
Ceres Crystal Industries gets 2,000 KWH for a $5.43 million expansion to double its workforce from 50 to 100 jobs.
Annual energy savings: $515,272
Cost per job: $10,305
Investment per KW: $2,715
Ashland Advanced Materials is a startup that gets 3,500 KW. It plans to invest $8.5 million and create 75 jobs. The company is seeking additional subsidies from the state and county IDA.
I've exchanged several e-mails, and had a long phone conversation, with Greg LeRoy of Good Jobs First about the Globe Metals project announced earlier in the week. He's more on top of subsidy deals than anyone in the country, and he offered a couple of interesting perspectives I wasn't able to weave into my story in Thursday's News.
LeRoy is not keen on the Globe project, calling it "a very pricey deal," because of energy discounts and tax breaks that will run as high as $360,000 per job over 10 years. He said the deal "begs common-sense questions."
-- Did the company say it needed all of the multiple subsidies -- on top of the cheap power -- to succeed?
-- Is there a plan to wean the facility from some of the subsidies after it takes off?
-- Will the New York customers of the discounted silicon also get multiple subsidies?
-- If the market for this product really is growing 30 to 40 percent a year, shouldn't successful companies be able to pay their fair taxes in a few years?
All good questions. I wonder if state officials asked them before striking the deal.
LeRoy has issues with the new set of subsidies that are being enacted at the federal level and elsewhere to promote renewal energies, green collar jobs, etc. He outlined his concerns in a recent piece for Grist, a very good environmental Web site.
"Some green-jobs policy proposals call for new economic development subsidies to promote the construction of manufacturing facilities for making renewable energy products. However, the average state already has more than 30 different economic development subsidy programs, and companies routinely get 8 or 10 subsidies in a single deal.
"Manufacturing has long been the most coveted kind of jobs investment. Build a windmill gearbox factory in a major industrial state in America today and it will be showered with so many corporate income tax credits, it will generate a negative income tax bill (i.e., net loss carry-forwards) for years. It will pay $0 or sharply reduced property taxes for 10 to 20 years. It will not pay any inventory tax or sales taxes on its building materials or machinery and equipment. It will receive tax-free loans that will greatly reduce its cost of capital. It will be offered subsidies on its land price, new-hire wages, and training. Ironically, it may even receive discounted electricity."
LeRoy suggests an alternative.
"Let's use some of those existing 30-odd job subsidies per state as leverage to get companies to reduce their carbon footprints. Let's use the winning frames honed by progressives as they have won other economic development reforms.
"These reforms include job quality standards (requiring companies that receive subsidies to pay good wages and health-care benefits), clawbacks (enabling government to recapture some or all of the money spent on subsidies if a company falls short on job creation), and disclosure (requiring government to disclose on the web company-specific costs and benefits). Half or more of the states and lots of cities and counties now have such safeguards.
"Shorthand, let's say: 'Every office building that wants a property tax abatement must go LEED or LEED-EB first," or, 'Any factory or warehouse seeking an investment tax credit must meet best-practice emissions and workplace safety standards.' You get the idea.
"If rules such as these were phased in for existing recipients and required of new ones, I believe two things would happen. Most companies would move to clean up their act, creating millions of new green jobs. And a minority of companies (the low-roaders) would refuse and start losing some tax breaks. That would be a win-win for taxpayers: more tax revenue from the new paychecks and new revenue from the polluters."
My colleage Peter Simon, reporting on a Buffalo Board of Education meeting Wednesday on the report prepared for the district on McKinley High School Principal Cyrstal Barton's role in the heavy-handed suspension of student Jayvonna Kincannon, said that Superintendent James Williams told reporters afterwards:
"To be honest with you, I have not read the report."
From a purely green economic development perspective, this is great news. Adding some 500 good-paying green-collar jobs in the emerging solar industry is big. And setting aside 25 percent of the silicon produced at the plant for solar panel manufacturers the state hopes to attract shows forward thinking on the part of the Empire State Development Corp., which negotiated the deal.
Enthused Bill Nowak of the Green Gold Development Corp.:
"This is a very good foundation to build on. If there is going to be a public subsidy, this is the kind of business it should be directed to. We're building for the future with this."
But the public subsidies involved are staggering.
Discounts on hydropower alone approach $30,000 per job, per year. There are big tax breaks through the Empire Zone program that state officials have yet to fully calculate, and and tax credits will reduce, if not if not eliminate, Globe's corporate tax bill to the state for years. I imagine there are federal tax breaks to be had, as well, although I could not confirm that in time for today's story.
By my calculations, Globe, for its $60 million investment, will get power discounts and state tax breaks worth $155 million to $180 million over 10 years. That works out to, ballpark, $310,000 to $360,000 per job.
Greg LeRoy of Good Jobs First, the smartest guy I know on subsidies, is not as cranked on the project as Nowak. Said LeRoy:
"It's poetic that power from moving water will help capture power from the sun while creating jobs in a community that needs them. This is a real "poster-child" story, the kind of story that public officials are prone to overspend for."
I'd really like to hear from readers on this, especially green activists and economic developers. And all you taxpayers, of course. It would be nice if posters used their real name -- I'm getting tired of snippy comments by those who use pen names. I put my name to my words, and think readers should do likewise.
I'm also including an online poll below that I'll keep open through the long weekend. One vote per person.
There's another report out that champions the development of wind power in Western New York. This one, released last week, is authored by University at Buffalo law professor Robert Berger, director of its Environment and Development Clinic, and Dwight Kanyuck, a student at the clinic.
Says the report:
"Western New York's proximity to the Great Lakes provides an opportunity to again become a leader in the generation of clean, renewable energy as an engine for regional economic development and to leverage the region's technology and manufacturing infrastructure to further an economic renaissance centered on alternative energy and a reputation as a clean, livable community."
The report recommends a coordinated approach to come up with a plan, and envisons the state, starting with the New York Power Authority, playing a key role.
Maybe I should call this installment "Blue People." Julie Barrett O'Neill, executive director of Buffalo Niagara Riverkeeper, is a champion of the region's waterways. She regards them as not only of immense value from an environmental point of view, but a potential economic powerhouse.
Involvement: I started at the University at Buffalo as an undergrad working on greening the campus -- projects such as the Natural Regeneration Areas and a campus environmental audit. At the Buffalo Niagara Riverkeeper, I lead the board, staff and more than 1,000 volunteers in cleanups, remediation, habitat protection and restoration, political activism, research and study, watching and monitoring the Niagara watershed, collaborating with like organizations around the Great Lakes, communicating a message of environmental stewardship in the media, and defending WNY's greatest asset, the Niagara River watershed.
Suggested green strategy for the region: Preserve and protect our region's greatest asset. We are on the edge of an inland sea with one-fifth the Earth's and 90 percent of North America's surface fresh water, an asset of diminishing supply and increasing value. We can offer its use to the nation as a whole but ONLY if the water stays here. It is not replenishable -- 99 percent of it is melt water from the Ice Age. The rest of the nation MUST understand it cannot leave here or it disappears forever. There are plenty of sustainable economic uses and these can be the foundation of the region's future economy.
Nifty idea: Chicago and Toronto are competing to be the greenest city on the Great Lakes; let's market this region as the "bluest" on the Great Lakes. People once came to this place because of the water; someday in the future they will again.
Regional assets to build on: Besides the water? We have the potential to be energy self-sufficient and we have vast tracts of vacant land within the city limits which can be considered a blank canvas for state-of-the-art sustainable development.
Obstacles to overcome: Widespread misunderstanding -- that there's a conflict between economic development and environment. Smart people know that's a false choice, that the best solutions align the two. Also, threats to our water from diversion to climate change to habitat loss to pollution. In 2010, the new census will reduce our representation in the federal government and time is running out to build some protections and funding in the national policy.
Tip for living green: Consume as little water as possible and get out and enjoy the watershed -- fish, swim, and boat in it if you can, or just walk down to the water's edge and appreciate its beauty.
Recommended book: "The Riverkeepers," by John Cronin and Robert F. Kennedy Jr., Touchstone, 1999
But, as I report in today's News:
