Amazon’s move to Long Island City will bring thousands of jobs, but the tax benefits that went into wooing the tech giant are also going to cost the city millions in missed tax revenue, at least in the first few years, according to the city’s Independent Budget Office.
In its annual four-year fiscal outlook, the IBO said Thursday that it expects the city’s economic growth to slow, as is happening around the nation, and the number of jobs it gains to fall from 55,500 in 2019 to 47,200 in 2022. Amazon’s campus, where it plans to station 25,000 new employees within a decade, will help to keep that number from dipping further, contributing about 12,000 new positions through 2022, according to the report.
Amazon’s new hub should boost city tax revenue by $9 million in 2021 and $19 million the year after, according to the IBO. That money, however, will be offset by the value of public benefits that the Seattle-based tech company is slated to receive under the city’s Relocation and Assistance Program, which offers a $3,000 per employee tax credit, according to the report.
"Amazon’s use of this program is projected to cost the city $15 million in 2021 and $21 million in 2022," the report said.
In all, the city is on track to forgo $6 million in tax revenue in 2021 and $2 million in 2022, according to the IBO’s estimates.
Citing questions about the efficacy of the Amazon deal, three city councilman announced Thursday that they are introducing legislation that would bar the city from signing non-disclosure agreements during negotiations with corporations or prospective developers in economic development projects.
"It’s outrageous that the Amazon deal was done in total secrecy by the Governor and Mayor," Councilman Jumaane Williams said in a statement. "Our government should be taking steps to act as a check on rampant corporate expansion, to ensure that any new development is designed with the greatest possible benefit to New Yorkers in need and to prevent any unintended consequences. The legislation we introduce today, and the transparency it will bring when it is law, will serve to prevent these secret giveaways in the future…"
Overall, the IBO forecast that city tax revenue would increase from $60.8 billion in 2019 to $67.9 billion in 2022, largely due to an increase in property tax revenue. City spending is slated to jump from $90.6 billion in 2018 to $100.5 billion in 2022, the report said.
The IBO said city spending is rising due to higher health care costs for municipal employees and other factors.