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Opinion: Amazon Shows It's Time For States To Stop The Corporate Welfare Bidding Wars

For decades, New York and other states engaged in economic cage matches to see who can offer the most lavish welfare packages to corporate giants. Enough.

Posted on February 14, 2019, at 9:43 p.m. ET

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Amazon’s decision to withdraw plans to locate a second headquarters in New York City was welcome news for many leaders like me who refused to accept a back room deal that put the needs of corporations over people. When HQ2 was announced last fall, I was the first elected official to speak out against it, because the idea of giving $3 billion of taxpayer money to one of the world’s wealthiest companies while city residents suffered amidst an affordable housing crisis and a crumbling subway system was unacceptable.

But even though we prevailed over Amazon this time, the larger issue of politicians handing taxpayer dollars to massive corporations instead of investing in the needs of everyday people remains unchanged. If we are going to shift this paradigm we need to think outside the box and move away from the race to the bottom competition that happens between states when companies like Amazon start shopping around for places to locate.

I propose a more cooperative approach. Earlier this month, I introduced legislation in the New York State legislature called the End of Corporate Welfare Act, which would create an inter-state compact that eliminates the practice of giving taxpayer subsidies to individual companies. I also started reaching out to legislators outside of New York to persuade them to do the same. So far, lawmakers in Illinois, Arizona, Florida, Connecticut and North Dakota have either followed suit or are willing to do so. And this is just the beginning.

For decades, New York and other states have engaged in an economic cage match to see who can offer the most lavish welfare packages to multinational corporations that announce plans to move locations, build new headquarters, or expand operations. Corporate executives simply sit back and wait as different locales jostle to make the best offer. What transpires is a harmful, zero-sum competition to bundle commercial property tax abatements with an alphabet soup of tax credits and handouts.

The End of Corporate Welfare Act would create a level playing field and end the enrichment of large companies at our expense. By fostering cooperation between states to eliminate corporate subsidies, the bill would return agency, wealth, and independence to communities and stop the secretive negotiations between government officials and executives which transfer billions to large companies with little to show in return.

Instead of competing, this bill lets us collaborate. It stops cities and states from trying to outdo each other while ignoring the needs of our constituents — a practice that only serves to make the rich richer and starves communities of finite resources like funding for healthcare, public education, infrastructure, or environmental sustainability. It’s a corporate-first approach that politicians sell to the people under the guise of job creation and economic development. But it just does not work and it’s a waste of taxpayer dollars.

When pushed about giving billions to Amazon, Governor Cuomo’s common refrain was that New York had to be competitive with other states who were offering the same. According to him, we had no choice. But he was wrong. We can choose to end the needless competition that pits states against each other. Corporations should never take precedence over people, especially while communities suffer from daily challenges that, but for lack of funding, could be addressed. It will take true leadership and hard work to bring this type of interstate compact to fruition, but it’s in everyone’s best interest to do so — except, maybe, billionaires like Jeff Bezos.


Ron Kim is a member of the New York State Assembly representing Queens, and a candidate for NYC public advocate.

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