New York City’s economic development model was already out of date even before the pandemic accelerated the broad move away from the workforce model of big offices in big buildings filled with lots of well-paid people working at expensive desks. That hadn’t been keeping the city’s leaders from doubling down on expensive subsidies, though, writes the CEA’s John Mozena in the Manhattan Institute’s City Journal:
In its 2019 annual financial report, the city reported losing roughly $3.8 billion in various forms of tax abatements. That’s more money than the $3.4 billion in revenue the Department of Finance collected from the General Corporation Tax (GCT) on “S” corporations doing business in the city and more than the city budgeted in its November 2019 financial plan to run both the New York Fire Department ($2.1 billion) and Department of Corrections ($1.3 billion).
New York’s next generation of leaders needs to adapt by moving away from subsidies and toward a focus on quality-of-life issues, removing artificial burdens on businesses and other limiting factors for NYC’s economic future, Mozena writes.