Groups Question Handling of Corporate Subsidies

NEW YORK CITY-Good Jobs New York and the New Jersey Policy Perspective are leveling their sights at a huge target--financial services firm Citigroup and other corporations of its size. The associations charge that such corporations play locales against locales to attract millions of dollars in subsidies without delivering on promised local-area jobs. The groups allege that the amount the financial-services firm has won from New York and New Jersey approaches $226 million over 18 years. The sum rises to $285 million when Kentucky and Texas are added into the mix.The NJPP's website describes the organization as a non-profit, non-partisan organization that conducts "research and analysis on important issues facing New Jersey." GJNY's site says it promotes policies that "hold government officials and corporations accountable to the taxpayers, particularly when economic development agencies give subsidies to large corporations that threaten to leave New York City."

Bettina Damiani, project director for GJNY, tells GlobeSt.com that "Citigroup is a prime example of how big corporations take advantage of corporate giveaways and don't always create the jobs that were promised."

But, she states, the problem does not lie solely at the corporate doorstep. Rather, "It's a combination of Citigroup and public officials," she says. "It's a bad stew that's been created. City officials don't get these promises concretely. They have to hold these firms accountable for job creation."

A spokesperson for Citigroup would not comment on the specifics of the study. To the general charge, she stated that the financial institution "has a significant workforce in New York and New Jersey, and we are proud of the contributions we've made to the communities and the economies of those states."

In New York State alone, says the report, "New York City and the Buffalo suburb of Amherst have over the past decade and a half awarded Citicorp and Travelers Inc.--which merged in 1998 to become Citigroup--and Citigroup itself, at least $125.5 million in subsidies. Despite accepting these subsidies, the company has since announced several rounds of cuts in its New York City-based workforce."

The groups are calling for tighter controls of such incentives. In its report, GJNY and NJPP say that, "States, in granting a subsidy to a company with multiple worksites in the state, should protect themselves by setting job creation and job retention requirements that apply to the company's entire statewide employment level."

Calls for comment from the New York City Industrial Development Agency were not returned. A spokesperson for the Amherst IDA stated that a comment would be premature before viewing the report.

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