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I traveled up to Albany, New York, this week to help out with the unveiling of a bill in the state legislature there that would prevent New York officials from subsidizing Amazon’s warehouse network. According to Good Jobs First, New York taxpayers have gifted Amazon with nearly $400 million in 15 warehouse deals since 2013. There’s simply no reason for the state to allow this — as subsidies have nothing to do with where Amazon locates — and it’s great to see New York lawmakers step up and try to do something about it.
But the bill is also part of a much broader movement in New York to challenge corporate power at the state level. For reasons I’ll outline below, New York has become the epicenter of an anti-monopoly movement in America. If the leaders behind the movement there are ultimately successful, I predict they’ll end up dragging other states and the federal government along with them.
First, here’s a quick overview of three major areas in which New York lawmakers are challenging corporate power:
Antitrust Reform: I’ve written a bit before about the 21st Century Antitrust Act — sponsored by Sen. Michael Gianaris and Assembly Member Jeffrey Dinowitz — which would reform New York antitrust law in what would be the most significant rewrite of antitrust statutes at any government level in a generation. It would implement a new standard, known as “abuse of dominance,” that would allow state antitrust enforcers or private actors to challenge a host of corporate practices that today’s antitrust law and precedent allow to go on unabated. It would also enshrine as illegal in state law the practice of monopolizing labor markets in order to drive down wages and working standards, as well as ban non-compete and no-poach agreements for workers. (I have a longer explainer on the bill here, if you’re interested.) There’s a coalition of national, state, and local groups, as well as major unions such as the Teamsters and the UAW, backing the bill.
Meanwhile, Sen. Rachel May and Assembly Member Anna Kelles have a bill to challenge Google and Apple’s power over app stores, and Assembly Member Ron Kim has one to eliminate the practice of forced arbitration, wherein corporations bar employees or customers from addressing disputes within the normal legal system. These are all measures that strike at the heart of corporate America’s power over workers and smaller, local businesses.
Economic Development Reform: New York is one of the worst purveyors of corporate tax incentives in the country, spending some $10 billion annually: About $4.5 billion of that is at the state level, and another $5.5 billion comes from a corrupt network of local development offices known as Industrial Development Agencies, or IDAs. Many terrible boondoggles have arisen out of this system, which even earned some of previous Gov. Andrew Cuomo’s cronies criminal convictions.
But the legislature seems very interested in starting to fix it, including via the bill to stop subsidies to Amazon and other e-retail warehouses that I mentioned above, which is sponsored by Sen. Sean Ryan and Assembly Member Michaelle Solages. There’s also a big coalition led by Strong Economy for All pushing for major changes to New York’s economic development practices and to redirect the money spent on corporate nonsense towards programs to help actual people.
Earlier this year, the state legislature held a day-long hearing to dig into all the problems in New York’s economic development system, which was followed up by a budget hearing that dug into them even more. (You can read my testimony from the latter here.) Sen. James Skoufis has taken the lead in generally ripping the corruption and lack of transparency in the current system.
Sen. Gianaris, meanwhile, has teamed up with Solages to propose banning nondisclosure agreements in economic development deals, and Kim has proposed capping the per-job cost of any subsidy deal. There’s also a serious push to let what’s known as 421-a, a notorious tax break that is meant to boost affordable housing but doesn’t, expire in June.
It’s a lot — and doing any of it would build a solid foundation under longer-term efforts to redefine economic development away from subsidizing specific corporations and toward building more holistic local economies.
The Attorney General Steps Up: Moving away from the legislature, Attorney General Tisch James — who pulled the plug on a gubernatorial run and is now running for re-election — has been doing a lot on the antimonopoly front too: Her office yesterday announced new rule-making around price gouging, which is technically illegal but rarely enforced. She is also leading a coalition of states in an antitrust case against Facebook and recently sued to block a major health care merger.
Now, why is all of this happening in New York? First, the moment when New York activists and elected leaders defeated the super-subsidy deal for Amazon’s HQ2 in 2019 was a galvanizing moment: It showed that the corporations marching around New York asking for the moon could actually be defeated. Community members and politicians alike realized they had power they hadn’t previously been using.
Second is the fall of Cuomo. The former governor for years cut a corrupt deal to keep Republicans in power in the state Senate, offsetting the Democrats who controlled the state Assembly. He was also massively invested in using the economic development system as a way to build political power, one of the results of which was the so-called “Buffalo Billion,” a $1 billion plan for the greater Buffalo area that blew up into several scandals, including a massive $750 million giveaway to Tesla for an underwhelming factory.
With Cuomo out of the way, and the whole legislature in Democratic hands, some of the things that once felt impossible are not very much in the realm of the possible, and would help counteract a future governor using the same systems to consolidate power in the executive’s office.
There are two wildcards that will prevent this momentum from turning into actual change: First, while the state Senate is comfortable with bigger changes, the Assembly is still held by older, more establishment types who are more comfortable with the status quo. It’s unclear the leadership in that body will move without being forced to, politically.
Then there’s the new governor, Kathy Hochul. She’s made some nods at tweaks around the edges — a partial ban on non-compete agreements and a reworking of 421-a that is not really a reform as much as a rebranding — but she’s raising tons of money from the same folks who always lined Cuomo’s coffers and she’s secretly negotiating a potentially massive subsidy for a semiconductor manufacturer. Would she be a roadblock if anything I mentioned above were to pass? I have no idea! I’m not sure others have one either.
As my colleague Matt Stoller has written, New York has historically been a hotbed of anti-monopoly sentiment and action. It’s great to see that same attitude running through the state today, and to have a chance to do something positive. I’ll keep you all posted on the progress.
This post initially appeared in a slightly different form on the author’s Substack, Boondoggle., on March 4, 2022.
Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, the Boondoggle newsletter, and the director of state and local policy at the American Economic Liberties Project.