Executive Summary

New York state officials in 2022 hailed plans by Micron Technology, an Idaho-based computer chip maker, to build a large manufacturing plant in Clay, near Syracuse.

The company wouldn’t have picked Central New York if not for $5.5 billion in state subsidies, on top of additional federal grants and loans, plus a slew of other promised state and local incentives.

But Micron’s decision hinged on more than just money. In fact, closer inspection of its deal with New York shows how differently the company is being treated compared to others.

Looking at their own circumstances, businesses should be asking the question: WHAT WOULD MICRON GET?

Applying this ‘Micron test’ helps explain the challenge of operating and expanding in New York, a struggle visible in employment and migration data. It reveals five key ways in which Micron is receiving special treatment compared to many if not most businesses:

• Significant help in navigating New York’s environmental review process;
• Major discount on property taxes;
• Exemption from the state’s corporate income tax;
• Guaranteed access to natural gas; and
• Discounted, reliable electricity

Instead of wooing mega-projects or favored industries, policymakers should target longstanding obstacles to economic growth, starting with those made visible with the Micron test.

This report includes eight recommendations on substantial reforms that could make it easier, more predictable and less costly to do business in the Empire State—and to reduce the staggering difference companies see when they compare their own experiences to Micron.

Background: From ‘START-UP’ to ‘Races to the Bottom’

New York’s job growth lagged the nation in the leadup to the coronavirus pandemic. After matching and even slightly exceeding the national growth in the early and mid-2010s, New York slowed significantly in 2019.

Almost one in four New York private jobs vanished at least temporarily amid the March 2020 lockdowns. The state did not fully recover its pandemic-driven job losses[i] until early 2024, two years after the U.S. had returned to its February 2020 levels.[ii]

Recovery has been especially sluggish across upstate (defined as the 50 counties north of Orange and Dutchess not subject to the metropolitan commuter transportation mobility tax). The state’s growth has been “notably unbalanced,” with upstate still far below July 2019 employment.[iii]

Unfortunately, this wasn’t the first time upstate had failed to bounce back.

Many upstate metros still hadn’t recovered their job losses from the 2008 recession when COVID hit. Some were still recovering from the 2001 recession when the Global Financial Crisis began.

Employment in August 2024 was below August 2000 levels in the Rochester, Glens Falls, Syracuse, Kingston, Utica-Rome, Binghamton and Elmira metropolitan areas, along with 15 other counties.

Many of these areas experienced economic trauma with the departure or downsizing from major employers, especially iconic manufacturers: IBM left the Binghamton area,[iv] Kodak’s Rochester operation shrank and General Electric’s Capital Region presence evaporated.

Carrier Corporation, a longtime Central New York employer, closed its Syracuse plant in 2004 and put 1,200 people out of work.[v]

“The longtime economic foundation of this region is crumbling and eroding and probably not coming back,” columnist Sean Kirst told NPR at the time.

New York is not unique in facing challenges from technology or global competition. However, it faces a major obstacle in the form of a lack of economic dynamism, an entirely self-imposed disadvantage stemming from policy decisions made by state and, to a lesser extent, local officials.

The most easily quantified, if not most visible, economic obstacle is New York’s high tax burden.

The nonpartisan Tax Foundation’s 2025 State Tax Competitiveness Index ranked New York last in the nation, because of the state’s “high rates and burdensome and nonneutral tax structure.”[vi]

To a significant degree, the draw of New York, and particularly New York City, has been enough to attract and retain individuals despite a high-rate, poorly structured tax code, just as many people choose to live in the city despite its high cost of living generally. At the margin, however, taxes matter—and in an era of enhanced migration, they now matter more than ever.[vii]

New York’s tax picture stands out by other measures:

• New York’s per-capita state and local tax receipts in fiscal 2021 totaled $10,380, almost 10 percent more than California, the next-highest state and 64 percent above the national average.[viii]
• New York City’s top combined state-local personal income tax rate (14.776 percent) is the nation’s highest.[ix]
• The median residential property tax bill in five downstate counties (Rockland, Westchester, Putnam, Suffolk and Nassau) was over $10,000 in the most recent federal data.[x] In Massachusetts, the highest-tax county (Middlesex) had a median bill of $7,037.

Taxes to be sure are rarely the sole or even primary factor in deciding whether a company moves to, expands in or remains in New York. The amount of taxation however is directly under Albany’s control, and the impact of tax policy on an individual firm can be quantified: the tax level determines exactly how much it pays in taxes and therefore how much profit is available for reinvestment or hiring.

The environment in which a business operates is also heavily informed by tax policy: taxes affect everything from housing to health care to energy. Nearly every cost on a business ledger can be traced back to a policy decision by state government that has inflated it.

New York however has also proven through a controlled experiment of sorts that taxes aren’t the only obstacle to doing business in New York.

State officials to great fanfare in 2014 launched START-UP NY, a program exempting new and relocating businesses from state income, sales and property taxes. The effort yielded anemic results, in part because of the state’s own bureaucratic complexities. Fewer than 800 jobs were created by program participants by the end of 2016, with firms committing to hit about 4,000 net new jobs no later than 2021.[xi] Still worse, the most recent state data show as of the end of 2022, officials counted just 2,796 net new jobs from START-UP participants.[xii]

START-UP’s poor performance was compelling evidence that Albany stifles growth in ways besides taxes. Other culprits are visible throughout the economy:

• Boosted by taxes and coverage mandates, New York in 2023 had the nation’s third-highest individual health insurance costs ($9,173) and second-highest family health insurance costs ($26,355).[xiii] This translates into higher labor costs for employers and lower take-home pay for workers.
• A 50-state review of workers’ compensation insurance costs, conducted by Oregon state officials, has repeatedly found New York near the top. The Empire State came in #2 in 2020 and #4 in 2022, when premiums were most recently estimated at 69 percent above the study’s index rate.[xiv] This has an outsized effect on construction costs relative to other states.
• New York’s minimum wage in January rose to $16.50 per hour in New York City, Westchester and Long Island and $15.50 in the remainder of the state, more than double the $7.25 federal minimum (paid in neighboring Pennsylvania).[xv] The state in general takes an expansive view of unionization, overtime and other rules that reduce the flexibility with which firms manage their workforces.
• New York businesses pay some of the nation’s highest liability insurance premiums. Recommendations for a comprehensive overhaul of the state’s tort climate, identified decades ago by a commission empaneled by Governor Mario Cuomo, have gone largely unheeded.[xvi]
• New York in 2019 adopted aggressive and arguably impractical greenhouse gas reduction targets which, unlike many other states’ targets, require significant cuts as soon as 2030.[xvii] These targets on their own could make operations in the state cost-prohibitive or otherwise impractical for some industries. Still worse, state officials in January 2024 missed a statutory deadline to publish the associated regulations, leaving firms mired in uncertainty about the legality and cost of future business activities.

The status quo reflects an unwillingness of governors and state lawmakers to upset entrenched interests including labor unions, environmentalist outfits and trial lawyers for whom the status quo is lucrative, both financially and politically, but at the expense of New York’s economic competitiveness.

New York governors and lawmakers have spared no (taxpayer) expense in trying to mitigate the state’s competitive disadvantage—or at least to be seen trying to mitigate it.

But instead of attacking the policies diminishing New York’s competitiveness, officials over the past two decades favored a strategy in which state funding was directed to “mega-projects” in hopes of attracting a large employer around which a local ecosystem would develop.

In 2006, Governor George Pataki and legislative leaders announced that New York had persuaded a microchip manufacturer to locate a fabrication plant, or fab, in Saratoga County. Advanced Micro Devices, whose manufacturing operation would later be known as GlobalFoundries, received a $650 million[xviii] grant (about $1 billion in 2024), plus other subsidies and infrastructure support, for building in Malta, about 25 minutes north of Albany.

GlobalFoundries began operations at the site in 2012 and eventually moved its headquarters there in 2021.[xix] It employs about 2,500 people in the Capital Region.[xx]

The main grant that lured GlobalFoundries to Malta worked out to $400,000 per job in current dollars, a figure that rises when refundable tax credits and electricity subsidies are added.

Today the company is also poised to receive additional public funds under the federal CHIPS and Science Act and New York’s Green CHIPS program. New York’s planned $575 million subsidy to create an additional 1,508 jobs works out to $381,300 per job, on top of the federal incentives.

Retrospective analysis of the deal has been limited; state officials, for instance, never posited what better use New York might have made with $1 billion.

The ultimate cost to taxpayers ended up being slightly lower than planned because the Legislature, on Governor Andrew Cuomo’s urging, exempted manufacturing firms from the state’s tax on corporate income. This, explained below, was a rare example of state policy coming close to being uniformly applied to foster broad, rather than targeted, economic growth.

Even if state mega-projects would have been successful on their own terms, state policy remains focused on overcoming a bad business climate rather than creating conditions for organic economic growth. And plenty of projects have not been successful on their own terms.

Numerous facilities of varying size were built with state funds across Upstate New York during the 2010s. One was the Athenex pharmaceuticals facility in Chautauqua County, on which state taxpayers spent at least $194 million.[xxi]

“There is no longer any sign of Athenex on Route 5 in the town of Dunkirk. The building erected for the company in 2016 with $200 million in state money stands mute. The Athenex branding once visible on Route 5, on entrance signs and in the lobby, was quietly removed over the winter.”[xxii]

The most notable example was the SolarCity factory in Buffalo, which was built and equipped at a total taxpayer expense of nearly $1 billion.

John Bacheller, a top economic development official under Governor George Pataki, warned in 2016 that the SolarCity deal carried massive risk for state taxpayers and that the associated job-creation “has been greatly overstated.”[xxiii]

Bacheller’s warnings proved prescient as SolarCity’s operations shifted radically, as both the employment targets were pared back and the nature of those jobs shifted from manufacturing to predominantly desk jobs.[xxiv]

“The suppliers that Cuomo predicted would flock to a modern manufacturing hub never showed up,” The Wall Street Journal reported last year. “The only new nearby business is a Tim Horton’s coffee shop. Most of the solar-panel manufacturing equipment bought by the state has been sold at a discount or scrapped.” [xxv]

Besides mega-projects, New York state officials have taken a range of other targeted approaches, all of which center on boosting specific projects or industries rather than improving economic conditions:

• Beginning under Gov. Andrew Cuomo, the state began bundling various economic development grants and challenging regions to compete for larger sums. The winners were announced as part of an awards-style ceremony sometimes derided as “Subsidy Day”[xxvi] or “Upstate Hunger Games”[xxvii] (a reference to the dystopian book series about young people fighting to the death for the amusement of wealthy government elites).
• The state’s Downtown Revitalization Initiative (DRI) has sprinkled upwards of $1 billion across downtowns but no data has been produced demonstrating self-sustaining transformations or otherwise indicating DRI made a lasting difference.
• Officials beginning in 2004 aimed to attract film and television productions by offering increasingly generous refundable tax credits for New York-linked activity. The pool of available credits was increased in 2023 to $700 million, even as a state report revealed the program generated just 31 cents for every dollar paid out by taxpayers.[xxviii]

The common thread across mega-projects and other New York incentives is a refusal to address the policies making them seem necessary for economic growth.

The Incentive for the Incentives: Bringing Micron to NY

Policymakers, already frustrated by upstate’s sluggish performance, saw a related problem as the state shed more than half its manufacturing jobs in just two decades: employment in the sector collapsed from just over 1 million jobs in 1990 to fewer than 500,000 by 2010. The state had about 420,000 manufacturing jobs in 2024—less than a quarter of what it had in the two decades after World War II.[xxix]

Source: US Bureau of Labor Statistics via FRED

The national discourse in recent years has focused on the extent to which microchip supplies are vulnerable to disruptions, as factors ranging from the COVID-19 pandemic to droughts in Taiwan caused chain reactions throughout the economy. That prompted federal lawmakers in 2021 to begin crafting incentives to bring more microchip manufacturing, which happens primarily abroad, to the United States. Legislation introduced in the U.S. House of Representatives that summer became the basis for the CHIPS and Science Act of 2022.

Congress passed the CHIPS & Science Act in July 2022, appropriating $54 billion to incentivize domestic semiconductor manufacturing, and authorizing additional tax credits and financing.[xxx]

But as explained below, even these massive federal incentives weren’t enough to make operations in New York financially attractive.

Amid Albany’s end-of-session rush, state lawmakers filed legislation on May 31, 2022 authorizing up to $10 billion in “Green CHIPS” incentives. Waiving the three-day waiting period for new legislation, and without hearings or witness testimony, lawmakers approved the bill.

Senator Liz Krueger of Manhattan, a consistent critic of state economic development programs, urged her colleagues to oppose the measure.

“I respect the people who have dreams of what might happen,” she told the chamber. “But I’ve watched this state for decades make deals that are races to the bottom with people from other states, from county to county, where we give away our taxdollars. Sometimes when you add them up, they’re dramatically more than could ever be seen as new economic activity from the program.”[xxxi]

Krueger’s warning went unheeded, as all but one other senator (James Skoufis of Orange County) voted for the bill.

The Assembly debate was even briefer. Assemblyman Al Stirpe of Onondaga County explained his vote:

“It removes the final objection to selecting several sites in New York State, the largest of which is in my district, for the development of some massive semiconductor manufacturing facilities.”

The bill passed the Assembly on June 4, 140 to 4, with no member speaking in opposition.[xxxii]

The Green CHIPS Act did not reduce the cost of doing business in New York or otherwise improve the business climate. The “final objection” to which Assemblyman Stirpe appeared to be referring was that existing economic development programs didn’t offer companies enough money to overcome other obstacles to moving to and doing business in New York.

With President Joe Biden’s signing of the CHIPS and Science Act on August 9, Governor Hochul approved New York’s own measure two days later. Washington and Albany had created the conditions under which state officials could potentially outbid other sites worldwide.

Hochul on October 4, 2022 announced Micron would open a major manufacturing facility in Clay, a northern suburb of Syracuse.[xxxiii] The two-phase plan would have the company construct and operate four fabs to make dynamic random access memory chips (DRAM).

The announcement was remarkable because the company and the region were anything but a natural match.

Micron has no historical connection to New York. Founded in Idaho in 1978 as a small chip-design firm, the company later began manufacturing chips and acquiring chip-making capacity from other businesses.[xxxiv] Micron operates a chip fab in Virginia as well as a smaller plant at its global headquarters in Boise and has manufacturing facilities in Japan, Malaysia, Singapore, Taiwan and China.[xxxv]

Central New York meanwhile has no substantial link to the semiconductor industry. Efforts under Governor Andrew Cuomo to get a semiconductor-based lighting manufacturer, SORAA, established in DeWitt failed to take root, even after the state spent $90 million on a factory.[xxxvi] An additional $13 million in state aid attracted a different company, NexGen Power Systems, but the plant closed suddenly in December 2023.[xxxvii]

Plans for Austrian firm ams AG to build a major fab outside Utica, for which state officials broke ground in 2016, fizzled within months.[xxxviii] A smaller fab for silicon carbide wafers (not DRAM) was later built by Cree | Wolfspeed with taxpayers covering about $500 million of the $1.2 billion project. It opened in 2022.

How much did state and local officials have to offer Micron to overcome these disadvantages, to win the “race to the bottom”?

New York had faced tough competition from Michigan, which had offered more than $4 billion in incentives (not including exemptions from property taxes on equipment and sales taxes on inputs to which companies aren’t otherwise subject in New York).[xxxix] State officials hoped the company would construct a plant between Grand Rapids and Lansing.

To put it in context, consider that Micron also planned an expansion at its historical home in Boise, prompting Idaho lawmakers to approve House Bill 678, the Idaho Semiconductors for America Act. The measure, signed by Governor Brad Little in March 2022, exempted certain companies from sales and use taxes on semiconductor research and manufacturing activities.[xl]

Idaho essentially agreed to forgo the sales tax receipts on activity that otherwise might not happen.

New York offered considerably more.

What Would Micron Get?

In addition to the federal incentives provided under the federal Chips and Science Act, state officials estimate the incentives powering New York’s agreement with Micron would exceed $11 billion.[xli]

The terms included the following:

• Up to $5.5 billion in refundable “Green CHIPS” state tax credits, awarded in two phases:
  • $4.72 billion for “qualified investment” in New York
  • $546 million in employment-based incentives
  • $234 million for “research & development expenditures” in New York
• Sales and use tax abatements valued at $4.9 billion.[xlii] This included exemption of sales and use taxes “on all construction and building materials” subject to such taxes involved in construction of Phase 1.
• A 49-year real property tax abatement, with estimated savings of $284 million[xliii]
• Up to $200 million from NYS for local roadway improvements and other infrastructure[xliv]
• $100 million from NYS to seed a “community investment fund”[xlv]
• Reinvestment into the industrial park of the $30 million site purchase price (which would be exempted from the mortgage recording tax).
• $25 million in county payments:
  • $10 million to help Syracuse University establish a “Semiconductor research and development initiative” in Syracuse
  • $5 million “to assist with initial hiring during Fab Complex startup”
  • $5 million “to support local skill development for Onondaga County residents”
  • $5 million “façade grant” for “exterior improvements to the on-site structure”
• Guaranteed, and discounted, electricity supply from the New York Power Authority, for a savings valued at about $3 million per year as of 2028[xlvi]

Micron stands to receive other negotiated benefits from the local sewer and water entities, as well as from National Grid, the local gas and electricity utility. These incentives must be considered separately however, due to Micron’s uniquely large demand and the extent to which cost recovery for any discount is socialized through user fees. For instance, Onondaga County is considering building a $500 million sewer treatment plant to accommodate Micron, though Micron would likely not be the only customer.[xlvii]

Avoiding Another SolarCity

New York’s deal with Micron imagines two phases. The first, involving the construction of two fabs, would have the company spend $21 billion on “construction/renovation” and $26.6 billion for “machinery and equipment” between 2026 and 2035.[xlviii]

Here an important distinction should be drawn between Micron and past New York mega-projects. Rather than a cash grant (as SolarCity, GlobalFoundries and others have received) Micron would get $122 million in refundable tax credits in the first year, rising to almost $369 million at the end of that ten-year period.

The amount of tax credits awarded would be linked to three things: job creation, investment, and research and development activity.

Of the $2.7 billion in Phase 1 incentives, $2.4 billion would be tied to the amount spent on “qualified investment”—meaning the state would pay as long as Micron hit minimum job creation targets.

While the agreement sets an “upper net new job commitment” of 4,040 jobs in 2029, the “minimum net new job commitment” is just half that, 2,020 jobs.

The term sheet requires Micron to have added 4,680 employees by 2035, but the company would hold enormous leverage over New York to renegotiate the terms of the deal and win larger incentives and/or lower job creation requirements (as other companies have).[xlix] For instance, lawmakers could face demands to lower the “benefit-cost ratio” that requires Micron to put up $15 for every dollar of state funds directed to the project.

Assuming Micron reaches its 4,680-job commitment for 2035, New York would that year alone give the company a $78,810-per-job subsidy through the tax credits alone.

Phase 2, beginning in 2036, would involve Micron spending an estimated $10 billion on construction and almost $42 billion for machinery and equipment.

Micron says it would that year add between 1,000 and 2,436 employees over Phase 1 levels, with a similarly structured target of having added 4,325 employees by 2045.

Spending on this second phase would total $2.8 billion, again with most of the state incentive (over $2.3 billion) based on the amount of investment rather than job creation.

It remains to be seen how and when funds would flow to Micron because, as explained below, the project has fallen behind, and risks falling further behind, schedule.

Applying the Micron Test

Policymakers and businesses should ask one question: WHAT WOULD MICRON GET?

At first glance, Micron’s selection of Central New York can be attributed to the financial benefits being offered. But state records tell a more interesting story: taxpayer largesse might not otherwise have been enough to get the company to set up shop in Clay.

Micron’s experience highlights the myriad obstacles New York businesses face, helping to explain why more companies aren’t thriving or opening in New York—and what policymakers should do to change that.

As START-UP NY demonstrated, tax levels are not the end-all, be-all of operating and growing in New York. Even so, they directly affect a company’s bottom line. Micron is poised to benefit from favorable provisions that don’t uniformly apply to other companies or even to other Central New York manufacturers.

SEQR

The first question faced by a company looking to build or expand in New York is whether they will be allowed to.

In most states, developers must comply with local land-use ordinances and state and federal laws that might relate to their specific activities. New York, however, requires an extra approval under its 1975 State Environmental Quality Review Act (SEQR) that far exceeds the typical local planning process.

SEQR and several other state laws are modelled after the National Environmental Policy Act (NEPA) signed by President Richard Nixon in 1970, which created a process for assessing a project’s potential environmental impact. But not all “little NEPAs” are the same. Massachusetts’[l] law, for instance, is limited to state-level regulatory actions, while neither Connecticut’s[li] nor New Jersey’s[lii] statutes apply to private projects.

New York imposes SEQR requirements on local governments and requires developers to follow the SEQR process even if they’re privately funded. SEQR is also one of only six state laws with “action-forcing” provisions, “either requiring lead agencies or giving state agencies discretion to certify that adverse environmental impacts are either sufficiently mitigated or that reasonable alternatives are not available.”[liii]

New York takes a more expansive view than the federal government of which activities should fall under its review process:

“An environmental assessment and a determination of significance must include consideration of the potential for primary (direct) and secondary (indirect) impacts, long- and short-term impacts, and cumulative impacts of an action, to the degree they are determined to be relevant and significant to an action.”[liv]

SEQR also covers a more expansive range of environmental impacts, regulating “the physical conditions which will be affected by a proposed action, including land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance, existing patterns of population concentration, distribution, or growth, and existing community or neighborhood character.”[lv]

Source: NYSDEC

The law works at cross purposes with nearly every state priority, slowing or otherwise complicating construction of housing, solar panel arrays, water infrastructure and transit projects.

Applicants generally face three steps: a determination of whether a proposed action is subject to review, an assessment of the environmental impact, and a detailed review of the action’s impacts and measures required to reduce or mitigate that impact.[lvi] Under SEQR, this results in the development and acceptance of an Environmental Impact Statement (EIS).

The SEQR process often begins with a gamble: a local government agency can issue a “negative declaration,” indicating that the action would not “significantly impact” the environment. That allows them in many cases to forgo the most onerous parts of SEQR.

But what happens next can depend on project opponents’ appetites, and budgets, for litigation. Opponents can challenge whether the lead agency has met SEQR’s “hard look” standard, to determine whether officials “identified the relevant areas of environmental concern.”

If an aggrieved party challenges the determination and prevails in court, the project can be sent back to the starting line. SEQR in many instances is a weapon to be wielded not in defense of the natural environment but in opposition to developments for myriad personal reasons.

For instance, a rezoning plan approved in 2022 by the City of Troy was blocked in October 2024 after an appellate court held officials had “failed to take the necessary hard look” in view of the “site’s significant archaeological history” before allowing up to 240 units of housing on the 11-acre parcel.[lvii] While framed around concerns about Native American artifacts, the opposition appeared to be driven by neighborhood opposition to new housing.

In his annual review of SEQR cases, Columbia Law School Professor Michael Gerrard noted that in the dozen 2023 cases looking at the adequacy of environmental impact statements, the court had upheld them as adequate in all but one.[lviii]

The length, complexity and overall uncertainty around SEQR proceedings has a chilling effect on development, as investors must weigh the risks of stranding capital on projects that will never come to fruition.

Even state agencies themselves are subject to SEQR: when DEC in January 2017 sought to update the regulations guiding the SEQR process and the law’s applicability, the agency had to follow the SEQR process.[lix] Finalized regulations, meant to make “modest” improvements to the process of building in New York, didn’t take effect until January 2019—two years later.[lx]

Members of the quasi-governmental Capital Region Economic Development Council in November 2011 summarized the problems with SEQRA:

“SEQRA is seen as cumbersome, vague, with little certainty on timetables or grounds for determinations. SEQRA was written to protect separation of environmentally sensitive or residential uses of property from industrial activity. But this valuable objective, when implemented in daily practice, can also have unintended consequences — stymieing redevelopment even on previously industrial property and especially, lessening New York’s ability to win important ‘game changing’ projects. The SEQRA process provides no way to streamline procedures for cases where the project is located at a large industrial site where manufacturing has been conducted for many years. SEQRA should be flexible enough to consider expedited reviews and approvals for projects to be located at brownfield sites, vacant sites, existing and long-standing industrial sites.”[lxi]

Micron’s path forward is complicated because it needs approval from the Army Corps of Engineers for its plans to fill in wetlands on the site.[lxii] The company also faces the additional twist of having at least one federally protected species, the Indiana bat, present on the site.

Yet as explained below, government officials have given Micron many advantages, overcoming challenges that could otherwise doom projects before they could be proposed.

A Head Start…

Local officials made plans to woo and welcome Micron long before Micron was considering the Syracuse region. The Onondaga County Industrial Development Agency (OCIDA) for decades sought to attract a major employer, with a focus on an undeveloped swath of land about 20 minutes north of downtown Syracuse on the east side of the town of Clay, near Cicero.

OCIDA aimed to expand and develop the site, called the White Pine Commerce Park, by purchasing nearby parcels (sometimes far above market-rate). The agency in some cases made these deals after threatening to seize the private homes of families residing nearby using New York’s expansive eminent domain law.

Getting the land was one thing, but making it ready for building was another. OCIDA spent at least $3 million in public funds on various surveys, design work, and other preparations that would ultimately benefit whatever company took up residence. The agency called this “Project Yankee.”

In its agreement with Micron, OCIDA indicated that a “final, generic, supplement [sic] Environmental Impact Statement (EIS)” has been “completed by OCIDA at no cost to Micron.” This reflects a years-long process in which OCIDA had compiled information and collected public comments, totaling more than 800 pages.

In July 2021, more than a year before announcing Micron had picked Clay, OCIDA issued a Draft Supplemental Generic EIS and adopted a SEQR findings statement that resolved to mitigate adverse environmental effects on the site “to the maximum extent practicable.”[lxiii]

Micron and OCIDA still face a grueling process to get the project to the finish line, but the years of work and public funds already committed give them considerably better odds of making it through the SEQR process than companies would otherwise face.

A Helping Hand…

OCIDA wasn’t just the owner of the Micron site: it was also the agency shepherding the company’s application through the SEQR process.

The agency has visibly kept the process moving by acting on Micron matters as quickly as practical.

As E.J. McMahon and Michael Wright pointed out in their 2013 criticism of the law, Streamlining SEQR: “A developer helps its cause by being organized and responsive, but there is little it can do if the lead agency has no incentive to act quickly.”

This is a major distinction between Micron and projects that might not benefit from a governmental champion, especially on less glamorous projects.

For instance, a 2016 application to the Hudson planning board by a Columbia County mining company dragged on into 2023 as city officials first argued with a neighboring town over who would be lead agency and later tried to subject the company to a more expansive environmental review than what the lead agency required.[lxiv]

Micron’s cause is also boosted by the involvement of state economic development personnel. Empire State Development, New York’s economic development agency and a key player in the Micron deal, has a “Planning & Environmental Review” office tasked with helping state-favored projects navigate regulatory processes.

ESD’s efforts however are focused on helping to get preferred firms through the SEQR process, not improving the SEQR process for others.

…And Still Behind Schedule

Micron broke ground on its smaller Boise site—which, like the Clay site, is subject to NEPA—in September 2022, began construction in October 2023, and expects “meaningful DRAM output” by 2027.[lxv]

In a June 2024 filing with OCIDA, Micron officials gave a stark summary of the difference in timelines for their Idaho and New York plants:

“Micron’s Idaho facility will come online in November of 2025 and both Fabs 1 and 2 of the New York campus will come online by end of 2029.”[lxvi]

Micron that month suggested it expects its third Clay fab to come online in 2035, following by the fourth in 2041.[lxvii]

Despite the assistance of local and state officials, Micron has had to repeatedly postpone construction on its New York site.

OCIDA, the current site owner, each year has a five-month window, between November and March, in which to cut trees in which federally protected Indiana bats might roost. The agency missed its 2023-24 window, and is poised to miss it again, before the SEQR process concludes.

OCIDA had stated in February 2024 that it would have the EIS by “late spring.” OCIDA head Robert Petrovich in September 2024 told county legislators his agency hoped to have a draft EIS “sometime around mid-December” followed by a public comment period.

The Post-Standard reported in March 2024:

“Initially, Micron said it would start building in 2024 and open the first two fabs by 2032, an eight-year construction timetable. Construction time has now been shrunk to four years, from 2025 groundbreaking to 2029 production start.”

The 2029 production start is now in question as the company is still completing its SEQR and NEPA environmental reviews.

“We expect construction site preparation to begin in calendar 2025,” the company wrote in an October 2024 disclosure to shareholders, “with production anticipated to ramp in the latter half of the decade.”[lxviii]

Micron and OCIDA must complete the SEQR process (publish their EIS, collect public input, and accept the EIS) and perform tree-clearing by late March 2026, or another seven months will need to pass before this site work can begin.

RECOMMENDATION: Increase SEQR Accountability

A crucial first step toward improving New York’s land-use rules (among other state policies) is to measure how they are performing now.

Lead agencies must file various notices for publication in DEC’s Environmental Notice Bulletin pertaining to certain steps in the SEQR process. A total of 1,118 such notices were filed last year.

However, DEC does not appear to undertake any retrospective analysis about how long projects ultimately took or whether they were completed. The agency in recent years has not named any opportunities for further reform (beyond the modest 2017 changes) or policed the SEQR process for abuse.

The Legislature should require annual reporting by DEC about how New York firms are faring in the SEQR process. The report should also include metrics including the duration of each step, the outcome, and the costs borne by either the lead agency or the developer in complying with the law.

RECOMMENDATION: Implement Practical SEQR Reforms

The costs and delays faced by Micron, and the extent to which uncertainty can otherwise prevent projects from ever being proposed, are reminders of the urgent need to reform SEQR.

So is the extent to which Micron is benefiting from OCIDA’s support. The law, if it is to remain, should not rely on the benevolence of lead agencies, and should instead assume every application is before an antagonistic body.

Appropriate SEQR reforms by the Legislature would include the following:

• Tightening (and in some cases, establishing) timelines for each step in the process;
• Granting approvals by default if an agency refuses to act at any step; and
• Eliminating broad references to “existing neighborhood and community character.”

Property Taxes

Property taxes are especially important to business finances because they must be paid regardless of whether a company is profitable. Businesses and homeowners outside New York City pay property tax to a county, a school district and at least one municipality. They may also pay taxes to special districts, such as fire and library districts.

Special arrangements between companies and local IDAs for “payments in lieu of taxes,” or PILOTs, are not uncommon and have been used for more than a half-century to attract or retain businesses. Property tax abatements are arguably the most defensible form of incentive, since those additional tax receipts often wouldn’t be coming to a locality “but for” the abatement.

The Office of the State Comptroller (OSC) in 2022 counted 4,320 projects, with total value of $132 billion (the equivalent of 6 percent of state GDP) getting some form of tax exemption through an IDA.

OSC has repeatedly reported that IDA incentives were responsible for more jobs being retained than being created. For instance, 2022 data showed projects getting IDA incentives involved the retention of 224,234 jobs compared to creating 213,887 jobs.[lxix]

New York ended 2022 with about 8.2 million private jobs, meaning about 5 percent of private jobs were part of an IDA agreement.

Micron reached a PILOT deal with OCIDA under which the company would pay $1 million in the first year instead of an estimated $4.5 million. Over the 49-year term, Micron would pay approximately $85 million over 49 years, for a savings of about $284 million.[lxx]

Many businesses aren’t just paying full freight: plenty are paying even more. “Homesteading” by many municipalities gives a discounted tax rate to what are often owner-occupied homes, shifting more of the burden to commercial and industrial properties.

Forty-seven local governments (12 cities, 17 towns and 18 villages) and 37 school districts tax businesses at a higher rate than one-, two- or three-family residential properties.[lxxi] In Rochester, for instance, business properties are taxed at $35.60 per $1,000 assessed value—62 percent more than homestead properties.[lxxii]

RECOMMENDATION: Reduce Property Tax Shifts—And Property Taxes

The demand for property tax abatements, such as what Micron is getting, is a symptom of an underlying condition: New York’s high property taxes.

IDAs have faced criticism in recent years for reducing the revenues local governments and school districts would otherwise collect. This distracts from the extent to which spending choices, both by local officials making appropriations and state government issuing mandates, have driven up property taxes.

Governor Hochul and state lawmakers instead should look to reduce the overall property tax burden that’s created the demand for incentives. Officials should focus on the explosion in per-pupil K-12 costs in New York school districts (now the nation’s highest), which makes up the largest part of any property tax bill, as well as rising pension costs for school and municipal workers.

As a starting point, the Legislature should amend Real Property Tax Law §1903 to end the practice of taxing commercial and industrial property at a higher rate from owner-occupied residences.

This could be achieved over a period of years by freezing the property tax levy on non-homestead properties until the rates converge, or by applying a tightening limit on the difference between rates (or a combination of the two).

Ending homesteading would make property taxes more uniform and eliminate a mechanism by which the tax burden has been unduly shifted to employers.

(The significant level of reform needed by New York City’s property tax system is outside the scope of this report).

RECOMMENDATION: Preserve The Property Tax Cap

State officials took an important step with the 2011 enactment of the property tax cap, which limits levy growth to 2 percent or inflation, with exceptions, for school districts and local governments outside New York City.

The cap became permanent in 2019 after shielding New York businesses and homeowners from tens of billions in aggregate tax increases.

The future effectiveness of the property tax cap is not guaranteed, however. Since its creation the cap has been under continual attack from public employee unions because it limited the extent to which unions could count on winning more generous pay and benefits in contract negotiations.

Some lawmakers have signaled their interest in weakening the cap by among other things changing how it is calculated or making it easier to override. Doing so would cause property taxes to rise faster and make investment—and job creation—less attractive.

State officials have made New York’s property tax burden worse in recent years by, among other things, retroactively sweetening pensions for public employees.[lxxiii]

The property tax cap creates certainty around project costs and allows companies to invest more in their workforces. The Legislature should preserve the property tax cap and allow it to keep saving money for homeowners and businesses.

Corporation Franchise Tax

Manufacturers have two main options in how they handle their revenues and costs: they can be taxed as “C” corporations or as various pass-through entities (such as “S” corporations) with the tax liability flowing to individual owners. Generally speaking, “C” corporations are subject to state and federal corporate income taxes, while the profits or losses of a pass-through are not. Instead, those are recognized on the personal income tax returns of the pass-through’s shareholders.

“C” corporations and pass-throughs have different rules for how investments and operating costs are treated for tax purposes. Every firm has its own constellation of operating and capital needs and financial arrangements. That affects which tax treatment is most advantageous.

The state since 2014[lxxiv] has effectively exempted “qualified New York manufacturers” (QNYMs) from the state’s corporation franchise tax, which otherwise would typically impose either a 6.5 percent tax on corporate profits or a 0.1875 percent tax on the firm’s New York-apportioned capital base.[lxxv]

Corporate income taxes are among the most economically destructive taxes because they target a firm’s ability to invest in either itself or its workforce. Micron stands to avoid this entirely. Micron, as a “C” corporation, would benefit from the 2014 change, but most New York manufacturers, being pass-throughs, do not.

Source: Executive Budget Presentation, January 2014

RECOMMENDATION: Extend the Manufacturing Tax Exemption

Assemblyman Al Stirpe since 2018 has carried legislation (A4168), that would create a “NY modification” to bring the tax treatment of pass-through manufacturers closer to the exemption enjoyed by their “C”-organized competitors. (The bill was last year sponsored by Senator John Mannion, who was elected to the U.S. House in November, and has not yet been re-introduced in the upper chamber in the current session.)

A 2021 study by Beacon Hill Institute (BHI) estimated state government would forgo $135 million in state tax receipts if pass-through manufacturers were exempted from the state personal income tax much like the exemption granted in 2014 to “C” corporations.[lxxvi] BHI estimated some of that loss would be offset by increased local tax receipts and that employment in and around the sector would rise by 5,100 (climbing to 6,549 jobs by year five).

The estimated cost of this change would be less than one-fifth of the $700 million in refundable tax credits New York expects to pay this year to the film and television industry.

Natural Gas

Another one of the most important questions a manufacturer must answer before opening or expanding in New York is whether it can get the energy it needs.

Businesses seek natural gas, a commodity that typically reaches New York through interstate pipelines, for a range of reasons. Heat-intensive manufacturing often require a combustible fuel source. For some manufacturers, natural gas is a feedstock for industrial processes.

Access to natural gas won’t be a problem for Micron: its agreement with New York initially called for “installation of approximately 2.5 miles” of a 12-inch distribution line.[lxxvii] That was bumped in July 2023 to a 16-inch distribution line running just over 3 miles.[lxxviii]

Micron would pay the upfront cost, estimated in 2022 at $12 million, but may get a discount both on the capital costs and future gas purchases.[lxxix]

In most states, none of this would be noteworthy. But New York’s (written and unwritten) policy toward natural gas pivoted abruptly in the last decade, and Micron’s confidence about getting not only access to the existing grid but also getting a three-mile pipeline stands in stark relief with the experience of current and would-be customers.

The economics around gas in New York changed significantly in recent decades with the boom in drilling, particularly in Ohio and Pennsylvania, which drove down costs and made gas more plentiful than ever. State officials themselves blocked high-volume hydraulic fracturing, but were happy to benefit from the reduced price and increased availability of gas flowing north through new and expanded pipelines.

Large facilities, including apartment buildings, hospitals and universities, turned to combined heat and power systems, sometimes called “cogeneration.” This allows them to burn natural gas to generate both electricity and heat and even sell excess electricity back into the grid. For much of the 2010s, New York was not only promoting but subsidizing cogeneration at residential, commercial and industrial sites.

The Cuomo Administration in 2016 however began blocking new natural gas pipelines through New York.

Public policy in 2019 again turned suddenly as the state backed away from promoting gas conversions and upgrades and instead promoted electrification. This continues to present practical issues for many businesses, especially energy-intensive ones.

The Climate Leadership and Community Protection Act signed by Governor Andrew Cuomo that year set aggressive, arguably unattainable, goals for reducing greenhouse gas emissions.

New York is sending mixed messages to current and potential employers.

Businesses seen as having political backing have successfully expanded thanks to new, sometimes miles-long natural gas distribution pipelines:

• The Coca-Cola Company’s last year broke ground on a milk-processing facility outside Rochester, with Governor Hochul in attendance. The company had examined using electricity to heat three boilers, but its consultant determined it would need an additional 78 megawatts of electricity. That’s more than what’s typically needed to power every home in Rochester, on top of the electricity it needed to perform other functions. The associated upgrades to nearby electric infrastructure threatened to delay the project, so the plant will instead use natural gas.[lxxx]
• Attempting to woo high-tech manufacturing to the Mohawk Valley, New York spent over $107 million since 2007 on sitework for the Marcy Nanocenter campus outside Utica. This included a 2.5-mile, 12” gas pipeline, which state economic development officials approved in February 2017 even after the Cuomo Administration had begun blocking some of the very pipelines that would augment the area’s gas supply.[lxxxi]
• State government is still subsidizing site upgrades that include gas service for several planned major industrial sites, including those in Niagara and Oneida Counties.[lxxxii]

Yet regulators have blocked expansions of the existing pipeline network, preventing new customers from tying in and leaving developers uncertain about whether gas will be available for their projects.

Interstate pipelines and gas utilities face ferocious opposition for attempting to expand or reinforce existing gas grids. The uncertainty around gas access has risen considerably:

• National Grid in late 2018 began restricting certain gas service connections in Brooklyn, Queens and Long Island and stopped accepting new customers in May 2019. After intense political pressure (and threats) from Governor Cuomo, the company resumed accepting hookups in November 2019. But around the same time, much of Westchester County had fallen under what became a years-long embargo on hookups by gas utility Con Ed because of their own uncertainty about natural gas supply.[lxxxiii]
• In 2017, Niagara Mohawk (an upstate National Grid subsidiary) warned regulators that it had denied some customer requests for new or upgraded gas service out of concerns that demand could outpace supply. [lxxxiv] Yet the PSC stalled a 2019 plan by the company for a pipeline, dubbed the Albany Loop, that would have addressed supply bottlenecks in the Capital Region.[lxxxv]
• Since 2015, companies have been barred from making new natural gas connections in Lansing, a town of 11,000 north of Ithaca in Tompkins County. New York State Electric & Gas (NYSEG) in 2021 asked the PSC for a waiver to allow the company to connect new businesses as it looked to reduce demand for existing customers. “The limited waiver would allow the Company to assist in fostering economic development by allocating gas service to commercial and industrial customers in the Lansing moratorium area with no practical alternatives,” NYSEG officials wrote.[lxxxvi] The PSC denied the petition, keeping homeowners and businesses unable to connect.

The inability to get natural gas via pipeline presents a serious threat to firms squeezed by regional or global competition.

Defense contractor Amphenol rebuilt its Delaware County facility after it was wrecked in 2011 by Tropical Storm Irene, in part based on assurances that the facility would get connected to the planned interstate gas pipeline, Constitution.

“A major part of our decision to stay in Sidney was the promise from state officials that they would assist us in bringing natural gas to our plant,” the plant manager wrote. “Natural gas is particularly important for us as all our major competitors’ manufacturing facilities are serviced by natural gas. We suffer a 30-40% energy price disadvantage by not having access to natural gas.”[lxxxvii]

That pipeline, however, was the first of several blocked under Cuomo, and more than a decade later, the facility remains reliant on delivered fuels. State government, however, awarded Amphenol a $1.25 million grant in return for building a solar array on the site of its destroyed factory.

International Paper’s Ticonderoga factory set out in 2013 to get natural gas from a pipeline that would run across central Vermont. But rising costs and other factors kept the project from breaking ground in early 2015 as planned, leaving the factory to rely on a “virtual pipeline” of multiple daily deliveries of compressed natural gas.[lxxxviii] The company still received $1 million in capital grants for its upgrades.[lxxxix]

A final layer of uncertainty around gas comes from the need for larger customers to obtain an air quality permit (under the federal Clean Air Act) from the state Department of Environmental Conservation. The Clean Air Act, adopted in 1970, was crafted with local and regional air-quality effects in mind, not the global-level effects of greenhouse gas emissions.

DEC denied similar permits in 2021 for a pair of power plant upgrades in Orange County[xc] and Queens[xci], primarily citing the fact that the plants would burn natural gas and that this would conflict with greenhouse gas reduction goals in the 2019 Climate Act. These denials had a chilling effect on the New York economy, as New York’s wider interpretation of the Clean Air Act introduced a new level of uncertainty about whether other projects would be allowed.

Yet Micron won’t have to worry about this hurdle, at least not in the near-term, because “a Preliminary Air Permit has been completed by OCIDA and will be transferred to Micron at no cost to Micron.”[xcii]

RECOMMENDATION: Reduce GHG Emissions With Natural Gas

Micron will be getting gas service otherwise unavailable to many New York businesses, benefiting from a level of political certainty similarly unavailable to other firms.

New York industries face global competition from manufacturers using fossil fuels themselves or drawing electricity from some of the planet’s most pollution-heavy grids. (China continues to add new coal-fired power plants; New York closed its last one in 2020.)[xciii]

Officials must confront an issue it has been trying to escape for almost a decade: it can allow businesses to use gas in New York, or it can turn them away to use coal or other more-polluting fuel sources elsewhere.

The Legislature should create a standard by which natural gas infrastructure, including transmission pipelines, can be approved if such permission results in a net reduction in global greenhouse gas emissions.

New York will ultimately have to reckon with the extent to which the 2019 Climate Act has made the perfect the enemy of the good. The law imposed constraints that are unworkable not only for the private sector but for much of government itself. The resultant uncertainty arguably hinders economic growth more than any individual policy would.

Electricity Supply

Access to low-cost and reliable electricity is a major concern for energy-intensive enterprises. But Micron has less reason to worry, both in terms of cost and reliability.

The plant at Clay, if fully built, would use three times as much electricity annually as the state of Vermont.[xciv] The company would get its first 140 megawatts (roughly the energy needed to power every residence in Syracuse) at a discount, through the Recharge NY program run by the New York Power Authority (NYPA).

NYPA among other things operates the state’s two large hydroelectric dams at Niagara Falls and Massena and Recharge NY sells power at below-market rates to attract or retain businesses. Hundreds of companies get discounted power from Recharge NY, but most don’t.

Micron’s Recharge NY allocation was by far the largest such award in NYPA’s history. National Grid estimated Micron would pay about 3.4 cents per kilowatt-hour (kwh) (supply) once operations scaled up around 2030, compared to an expected market price of 3.9 cents. That works out to a discount worth about $3 million per year as of 2028.

Correspondence with National Grid suggests Micron would also be exempt from certain state surcharges that further drive up electricity costs.

Besides the Recharge NY discount, Micron would be able to count on meeting the remainder of its supply needs (at least for the next several years) through NYPA’s High Load Factor (HLF) program. Under HLF, NYPA would buy whatever power Micron needs, and then sell it to Micron at the market rate.

Other companies face a very different situation.

NYPA’s below-market electricity sales and other subsidies distort sector-level data, so much so that the average electricity rate in New York’s industrial sector was last year one of the nation’s lowest (6.87 cents per kwh).[xcv] This reflects most (if not all) of the state’s largest electricity customers getting discounted electricity.

Looking at the entire economy, however, electricity in New York in 2023 averaged 18.28 cents per kwh. While that was lower than the prices in most New England states (where constraints on natural gas supply pushes electricity prices higher), the rates paid in New York were 45 percent more than neighboring Pennsylvania (12.57 cents) and 66 percent more than Ohio (11.04 cents).[xcvi]

The extent to which New York inflates electricity costs is partially visible in the budget of the New York State Energy Research and Development Authority (NYSERDA). Most of the organization’s $2.2 billion budget comes from direct or indirect surcharges on electricity customers.

• New York utilities and large electricity customers must purchase “zero emission credits” under a 2016 bailout for upstate nuclear power plants. These are expected to cost ratepayers $530 million in fiscal 2026, up from $509 million this year.[xcvii]
• The state requires fossil fuel power plants to participate in the Regional Greenhouse Gas Initiative (RGGI). This cap-and-trade program was designed to encourage construction of more efficient natural gas plants which would displace older gas, oil and coal plants. However, with New York blocking new gas plants, the system is no longer producing the intended displacement and instead behaving more like a tax. RGGI in 2024 added about $400 million to customer costs.
• New York further inflates customer bills by requiring large industrial customers and utilities to purchase renewable energy credits. The cost of these credits is expected to rise from $55 million in fiscal 2025 to $140 million next year.

The disparity in electricity costs between New York, Pennsylvania and Ohio is set to grow in coming years as New York phases in statewide mandates requiring electricity customers to subsidize offshore wind projects and transmission projects designed to benefit New York City and Long Island, as well as energy storage facilities meant to backup intermittent wind and solar generation.

After the departure of a pair of energy-intensive firms, one Saratoga County official in April summarized the threat New York’s overall energy picture poses to industrial customers: “energy wasn’t the straw that broke either of their backs, but it was a straw on their backs and it is a very serious issue.”[xcviii]

RECOMMENDATION: Allow More Competition for Electricity

When electric generators compete, there are benefits not only for customers but also for the reliability of the grid, air quality and the environment as a whole. More efficient units have displaced older, less efficient units and drastically reduced emissions since New York created a competitive market for electricity in the late 1990s.

But that progress came to a halt as the state blocked natural gas pipelines and subjected proposed power plants to arbitrary regulatory hurdles.

New York since 2021 has prevented upgrades and construction of new gas-fired generators. This has left the state more reliant on older, less efficient, less flexible and less reliable power plants. Allowing newer plants to displace these older facilities would push down customer costs and boost grid reliability. In the most extreme cases, the state Department of Environmental Conservation has defended the moves by making assessments about grid reliability—something for which DEC is not equipped, or authorized, to do.

An unscientific bias among state officials in favor of solar and wind projects—and against nuclear and hydroelectric system—has stunted innovation and slowed New York’s progress to reduce emissions.

To push down electricity costs, the Legislature should:

• adopt a policy of prioritizing affordability and reliability of energy, and explicitly permit activity that leads to net incremental reductions in greenhouse gas emissions;
• end its preferential treatment, both in terms of cost and intermittency, toward politically favored resources such as wind and solar, and end its prohibition on new hydroelectric dams; and
• create regulatory certainty around construction of nuclear power plants.

RECOMMENDATION: Shield Upstate from Downstate Mandates

Introducing more competition for electricity generation would help lower costs, but Albany is instead poised to artificially increase them.

Construction is underway on Champlain Hudson Power Express (CHPE), a transmission project that would bring electricity to New York City from Canada, bypassing upstate customers. Together with CHPE, a second, since-scuttled project would add between $5.9 and $11.6 billion to customer costs over 25 years.[xcix] Most of the funding for these, however, would come from customer bills north of New York City because the PSC plans to spread the costs of the projects, together known as “Tier 4,” across the entire state.

PSC Commissioner John Howard in April 2022, months before the Micron announcement, raised major concerns about Tier 4.

“There was a time when the need for nurturing and the fostering of growth in Upstate economy was priority one in New York State,” Howard said. “I believe that we have lost our focus.”[c]

Howard argued state officials had overlooked how much the Tier 4 obligations would hike costs for energy-intensive outfits. Most notably, Howard predicted—months before the Micron deal was announced—that microchip manufacturers would get relief from the state’s Tier 4 obligations.

It is important to note that Tier 4 was created not by statute but by PSC regulatory action, meaning the PSC reserves the option to terminate or modify it before customers begin paying in early 2027.

Besides Tier 4, the Public Service Commission is poised to spread other costs statewide. Offshore wind turbines, which would power Long Island and New York City, would be funded primarily from ratepayers north of New York City. Despite the regions west and north of Albany already getting more than 90 percent of their electricity from carbon-free sources, ratepayers there will soon have to also fund the state’s planned energy storage systems meant to displace gas-fired power plants that predominantly serve New York City and its suburbs, the cost of which will run far into the tens of billions of dollars in coming decades.

If they are to proceed, either the PSC, or if necessary, the Legislature, should limit the cost recovery for these programs to the areas that would be served by them.

Protecting New York From Further Shakedowns

Left to choose between reversing self-inflicted economic stagnation and the fanfare of heaping state resources on individual businesses to woo a large employer to a struggling region, state policymakers routinely choose the latter.

The federal CHIPS and Science Act kicked off a frenzy by several state and local governments to offer up the biggest incentive offers, a reverse goldrush in which New York has all too often participated.

What Senator Krueger called a “race to the bottom,” continues as policymakers ignore the fundamentals behind New York’s weak economic growth.

New York’s competition for mega-projects, such as Micron, SolarCity, and for politically favored industries, such as the film and television producers, pushes the total tax burden higher, shifts more of the tax burden on the remainder of New York families and businesses and steers resources away from state priorities.

The threat that an iconic firm might leave New York, wielded to great effect by Alcoa, the Buffalo Bills, television productions and others, prompts state lawmakers and governors to agree to economically unjustifiable terms.

Governors in all 50 states can shield themselves—and their taxpayers—from further exploitation.

Prompted by New York’s effort to attract Amazon’s “HQ2” to Queens—which included a $500 million cash grant on top of other incentives—Senator Julia Salazar and Assemblyman Ron Kim in 2019 proposed a prohibition against “company-specific subsidies”  (S3061/A5249) through an interstate compact. The bill was not voted on by either chamber and was not refiled this year, but lawmakers in other states have proposed similar measures. Creating and activating this compact will meaningfully arrest New York’s “race to the bottom.”

New York also has the option to unilaterally stop issuing these subsidies.

Legislation by Senator Robert Ortt and Assemblyman Steve Hawley (S1134/A2065) would unilaterally end the state’s $700 million-per-year subsidy for film and television producers. The program gives governors and lawmakers the chance to rub elbows with celebrities and brings productions to various New York locales, but a review by a state consultant last year found New York taxpayers were losing almost 70 cents for every dollar paid to support television and film production.[ci] The Ortt-Hawley bill would save taxpayers hundreds of millions of dollars annually and allow the Legislature to fund broad-based tax relief for businesses and families.

Absent either a legal or political defensive mechanism, Micron is set to become one of the state’s largest beneficiaries of taxpayer largesse. New York Court of Appeals Judge Robert S. Smith, dissenting in a 2011 case related to the state’s earlier subsidies for semiconductor manufacturing, offered a prescient warning that holds true today:

“I seem to remember a time when IBM could make money by selling its products for more than it cost to produce them. I would have thought semiconductor manufacturers could do the same. If they cannot, a bail-out for their shareholders is not a prudent use of more than a billion dollars in taxpayer funds. Of course, the New York Legislature, so long as it stays within constitutional limits, is free to disregard both received economic teachings and common sense.”[cii]

Cover photo credit: Glenn Coin, Post-Standard.

[i] U.S. Bureau of Labor Statistics and Federal Reserve Bank of St. Louis, All Employees: Total Private in New York [SMS36000000500000001], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SMS36000000500000001

[ii] U.S. Bureau of Labor Statistics, All Employees, Total Private [USPRIV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/USPRIV

[iii] McMahon, E.J. “NY Labor Day 2024: Most regions still haven’t recovered jobs lost in pandemic,” Empire Center, 29 Aug 24. empirecenter.org/publications/ny-labor-day-2024-most-regions-still-havent-recovered-jobs-lost-in-pandemic

[iv] “IBM to close offices in Endicott after nearly 100 years,” Spectrum News, 3 May 23. spectrumlocalnews.com/nys/central-ny/news/2023/05/03/ibm-to-close-office-in-endicott-after-nearly-100-years

[v] “Syracuse Economy Reels from Carrier’s Departure,” NPR, 3 May 04. npr.org/2004/05/03/1868543/syracuse-economy-reels-from-carriers-departure

[vi] Yushkov, Andrey et. al. “2025 State Tax Competitiveness Index,” Tax Foundation. 21 Oct 24. taxfoundation.org/research/all/state/2025-state-tax-competitiveness-index

[vii] Yushkov, Andrey et. al. “2025 State Tax Competitiveness Index,” Tax Foundation. 21 Oct 24. taxfoundation.org/research/all/state/2025-state-tax-competitiveness-index

[viii] U.S. Census Bureau, Tax Foundation calculations

[ix] “Personal income tax,” NYS Dept. of Tax and Finance. tax.ny.gov/pdf/data/tf-personal-income-tax.pdf

[x] Yushkov, Andrey, “Property Taxes by State and County, 2024,” Tax Foundation. taxfoundation.org/data/all/state/property-taxes-by-state-county-2024

[xi] Girardin, Ken, “START-UP melts down,” 3 Apr 17. empirecenter.org/publications/start-up-melts-down

[xii] “Comprehensive Economic Development Report,” ESD, 2023. esd.ny.gov/sites/default/files/media/document/ESD-Comprehensive-Economic-Development-Report-2023.pdf#page=11

[xiii] Hammond, Bill, “New Yorkers’ Health Costs Spiral as Officials Take Credit for ‘Savings’”, Empire Center, 17 Sep 24. empirecenter.org/publications/new-yorkers-health-costs-spiral

[xiv] “2022 Workers’ compensation premium index rates,” Oregon DCBS. oregon.gov/dcbs/reports/cost/pages/premium-index-rates.aspx

[xv] “Minimum Wage,” NYS Dept. of Labor. https://dol.ny.gov/minimum-wage-0

[xvi] Silverman, Cary and Mark Behrens, “State of Liability,” Empire Center, 12 Dec 17.

[xvii] Climate Leadership and Community Protection Act of 2019

[xviii]Micron Form 8-K, 22 Dec 06. ir.amd.com/sec-filings/filter/current-reports/content/0001193125-06-260492/d8k.htm

[xix] “GLOBALFOUNDRIES Moves Corporate Headquarters to its Most Advanced Semiconductor Manufacturing Facility in New York,” Press Release, 26 Apr 21. gf.com/gf-press-release/globalfoundries-moves-corporate-headquarters-its-most-advanced-semiconductor

[xx] “Governor Hochul Celebrates GlobalFoundries’ $11.6 Billion Investment to Expand Semiconductor Manufacturing Plant in Saratoga County,” Press Release, 19 Feb 24. governor.ny.gov/news/governor-hochul-celebrates-globalfoundries-116-billion-investment-expand-semiconductor

[xxi] “Annual Jobs Report, Loan and Grant Programs,”ESD. esd.ny.gov/sites/default/files/ESD-2021-Annual-Jobs-Report.pdf#page=18

[xxii] Stafford, MJ. “Bankruptcy Final Blow To Athenex That Once Brought Hope,” Post-Journal, 23 Jun 19. post-journal.com/news/local-news/2023/06/coming-up-empty

[xxiii] Bacheller, John. “SolarCity: The Risk Embedded in Buffalo’s Billions.” Policy by Numbers. June 2016. https://policybynumbers.com/solar-city-the-risk-embedded-in-buffalos-billion

[xxiv] Bykowicz, Julie & Ted Mann, “New York State Built Elon Musk a $1 Billion Factory. ‘It Was a Bad Deal.’” WSJ, 6 Jul 23. https://www.wsj.com/articles/elon-musk-tesla-buffalo-new-york-solar-plant-1b634b9e

[xxv] Bykowicz, Julie & Ted Mann, “New York State Built Elon Musk a $1 Billion Factory. ‘It Was a Bad Deal.’” WSJ, 6 Jul 23. https://www.wsj.com/articles/elon-musk-tesla-buffalo-new-york-solar-plant-1b634b9e

[xxvi] Vielkind, Jimmy. Twitter/X, 13 Dec 17. x.com/JimmyVielkind/status/940974563483160576

[xxvii] Hupfl, Ashley. “Upstate Hunger Games: Regions hope the odds are ever in their favor,” City & State, 15 Oct 9. cityandstateny.com/politics/2015/10/upstate-hunger-games-regions-hope-the-odds-are-ever-in-their-favor/179071

[xxviii] McMahon, E.J. “Billions in film & TV subsidies yield zero (or less) for NY economy, state-sponsored study finds,” Empire Center, 12 Feb 24. empirecenter.org/publications/billions-in-film-tv-subsidies-yield-zero-or-less-for-ny-economy-state-sponsored-study-finds/

[xxix] U.S. Bureau of Labor Statistics, All Employees: Manufacturing in New York [NYMFG], retrieved from FRED, Federal Reserve Bank of St. Louis; fred.stlouisfed.org/series/NYMFG

[xxx] “Estimated Budgetary Effects of H.R. 4346,” Congressional Budget Office, 21 Jul 22. cbo.gov/system/files/2022-07/hr4346_chip.pdf

[xxxi] NY Senate transcript, June 2, 2022

[xxxii] NY Assembly transcript, June 4, 2022

[xxxiii] “Hochul, Schumer, McMahon Announce: Micron is Coming to Onondaga County!” Press release, 4 Oct 22. governor.ny.gov/news/hochul-schumer-mcmahon-announce-micron-coming-onondaga-county-micron-will-invest-unprecedented

[xxxiv] “A history of Micron: Our timeline,” Micron Technology. micron.com/about/company/company-timeline

[xxxv] “Corporate profile,” Micron Technology, micron.com/about/company/corporate-profile

[xxxvi] Knauss, Tim, “Soraa walks away from $90M factory that NY built; $15M more brings new tenant.” Post-Standard, 20 Dec 17. syracuse.com/news/2017/12/soraa_walks_away_from_90m_factory_that_ny_built_but_15m_more_brings_new_tenant.html

[xxxvii] Moriarty, Rick, “Tech startup in $100 million DeWitt factory built by New York taxpayers closes,” Post-Standard, 4 Jan 24. syracuse.com/news/2024/01/tech-startup-in-100-million-dewitt-factory-built-by-new-york-taxpayers-closes.html

[xxxviii] Guzewich, Dan, “Austrian-based chip plant not coming to Marcy,” Rome Sentinel, 16 Dec 16. romesentinel.com/news/county/austria-based-chip-plant-not-coming-to-marcy/article_0a1342e1-e5c6-5aab-a277-e927ad9dac4e.html

[xxxix] LeBlanc, Beth, “Michigan offered Micron up to $27.9B in incentives to land semiconductor plant. It wasn’t enough,” The Detroit News, 25 Jul 23.

[xl] Idaho House Bill 678 (2022), legislature.idaho.gov/sessioninfo/2022/legislation/h0678

[xli] Incentive Proposal, 3 Oct 22

[xlii] Incentive Proposal, 3 Oct 22, p.7

[xliii] Term Sheet, Exhibit E

[xliv] Incentive Proposal, p.4

[xlv] Term Sheet, Exhibit H

[xlvi] Term Sheet, Exhibit G; author calculations

[xlvii] Coin, Glenn, “Onondaga County ready to put $20 million toward key piece of Micron infrastructure,” Post-Standard, 16 Jan 25. syracuse.com/micron/2025/01/onondaga-county-puts-up-20-million-to-kickstart-key-piece-of-micron-infrastructure.html

[xlviii] Incentive Proposal, p.3

[xlix] Term Sheet, Exhibit B

[l] “Purpose and Intent of MEPA”, mass.gov/info-details/purpose-and-intent-of-mepa

[li] CT CGS Ch. 439 §22a-1c

[lii] NJ Admin. Code §7:22

[liii] McMahon, EJ and Michael Wright, Streamlinging SEQR, Empire Center, 2013

[liv] SEQR Handbook, NYS DEC

[lv] NY State Law, Environmental Conservation §8-0105(6)

[lvi] Ma, Becker, and Kilgore, “Characterising the landscape of state environmental review policies and procedures in the United States: a national assessment,” at pg. 1039.

[lvii] Crowe, Kenneth “NY Court overturns Troy City Council’s rezoning of land for apartment project,” Times Union, 26 Oct 24. timesunion.com/news/article/n-y-appellate-court-rejects-troy-rezoning-seqra-19863018.php

[lviii] Gerrard, Michael B. “Annual SEQRA Review: Project Applicants Winning More Cases,” NYLJ, 11 Jul 24. scholarship.law.columbia.edu/faculty_scholarship/4510

[lix] “Draft Generic Environmental Impact Statement on the Proposed Amendments to the State Environmental Quality Review Act (SEQR) Regulations,” NYSDEC, Jan. 2017

[lx] “State Environmental Quality Review Act, Findings Statement for Amendments to 6 NYCRR Part 617 (2018),” NYS DEC, extapps.dec.ny.gov/docs/permits_ej_operations_pdf/617fnlfindings.pdf#page=26

[lxi] “Capital Region Economic Development Council Strategic Plan,” 14 Nov 11.

[lxii] Coin, Glenn, “Feds extend time for comments on Micron plans to fill in 200 acres of wetlands,” Post-Standard, 1 Jul 24. syracuse.com/business/2024/07/feds-extend-time-for-comments-on-micron-plans-to-fill-in-200-acres-of-wetlands.html

[lxiii] OCIDA Regular Meeting Agenda, 20 Jul 23 (PDF p.210)

[lxiv] A. Colarusso v. City of Hudson Planning Board, 2023 NY Slip Op 03397

[lxv] Micron form 10-K, filed 4 Oct 24.

[lxvi] “Application for Financial Assistance,” OCIDA, 17 Jul 23.

[lxvii] Coin, Glenn, “See Micron’s latest timeline for building all four fabs in Clay,” Post-Standard, 27 Jun 24. syracuse.com/business/2024/06/see-microns-latest-timeline-for-building-all-four-fabs-in-clay.html

[lxviii] Micron 10-K, October 2024

[lxix] “Performance of Industrial Development Agencies in New York State,” NYS OSC, May 2024. osc.ny.gov/files/local-government/publications/pdf/ida-performance-report-2024.pdf

[lxx] Term Sheet, Exhibit E & Incentive Proposal, Page 7

[lxxi] Publication 1023 (2021) – tax.ny.gov/pdf/publications/orpts/homestead.pdf

[lxxii] “Tax rates,” City of Rochester, cityofrochester.gov/departments/finance-department/tax-rates

[lxxiii] Girardin, Ken, “NY Taxpayers Face Bitter Truth from Sweeter Pensions,” 6 Sep 24. empirecenter.org/publications/ny-taxpayers-face-bitter-truth-from-sweeter-pensions

[lxxiv] Ch. 59 of the Laws of 2014, Part R

[lxxv] “Definitions for Article 9-A corporations,” NYS Dept. of Tax and Finance, tax.ny.gov/bus/ct/def_art9a.htm

[lxxvi] Burke, William F. and David G. Tuerck, “Untaxing New York Manufacturers II,” Beacon Hill Institute, Nov. 2021. beaconhill.org/BHIStudies/2021-Studies/Revised-NY-REPORT-Final-2021-Update.pdf

[lxxvii] Wynter Letter to OCIDA, Dec. 2, 2021

[lxxviii] OCIDA empirecenter.org/wp-content/uploads/2023/08/7-20-23-OCIDA-EAF.pdf#page=241

[lxxix] Hamlin Letter to OCIDA, Sept. 21, 2022

[lxxx] Girardin, Ken, “How Will A Major Milk Plant Fit Under NY’s Climate Limits? It Won’t,” Empire Center, 22 oct 24. empirecenter.org/publications/how-will-a-major-milk-plant-fit-under-nys-climate-limits-it-wont

[lxxxi] Meeting Minutes, ESD, 25 May 17. esd.ny.gov/sites/default/files/news-articles/05252017_ESD_BM.pdf#page=70

[lxxxii] “Governor Hochul Awards More Than $45 Million in Fast NY Grants to Transform Seven Commercial Sites Statewide and Attract High-Tech Manufacturing Businesses to New York State,” NYS ESD, 7 Mar 24. regionalcouncils.ny.gov/press-release/governor-hochul-awards-more-45-million-fast-ny-grants-transform-seven-commercial-0

[lxxxiii] Bryce, Robert, “Out of Gas,” Manhattan Institute, 2019. manhattan.institute/article/out-of-gas-new-yorks-blocked-pipelines-will-hurt-northeast-consumers

[lxxxiv] PSC Case No. 17-E-0238/17-G-0239,

[lxxxv] PSC Case No. 19-T-0069

[lxxxvi] PSC Case No. 19-G-0379, NYSEG Letter to PSC, 17 May 21.

[lxxxvii] McMahon, E.J. “Cuomo blocks gas pipeline,” Empire Center, 22 Apr 16. empirecenter.org/publications/cuomo-blocks-gas-pipeline

[lxxxviii] Krewinghaus, Graham, “‘Virtual pipeline’ of gas tankers in Champlain Valley sparks concern,” VT Digger, 20 Aug 24. vtdigger.org/2024/08/20/virtual-pipeline-of-gas-tankers-in-champlain-valley-sparks-concern/

[lxxxix] “International Paper Natural Gas Conversion Capital,” NYS ESD. regionalcouncils.ny.gov/cfa/project/41954

[xc] Whitehead letter to Danskammer applicants, 27 Oct 21.

[xci] Whitehead letter to Astoria applicants, 27 Oct 21.

[xcii] Term sheet, Section 11(f)

[xciii] Anchondo, Carlos. “N.Y. set to close last coal plant” Energy Wire, 6 Jan 20.

[xciv] Vermont’s 2023 electricity use totaled 5.4 million megawatt-hours (Vermont Electricty Profile 2023, EIA); Micron officials expect to use 16.2 million megawatt-hours (EAF, OCIDA).

[xcv] “Average Price of Electricity to Ultimate Customers by End-Use Sector,” US EIA.  eia.gov/electricity/annual/html/epa_02_10.html

[xcvi] “Average Price of Electricity to Ultimate Customers by End-Use Sector,” US EIA.  eia.gov/electricity/annual/html/epa_02_10.html

[xcvii] NYSERDA FY26 budget

[xcviii] Meeting Minutes, Saratoga County IDA, 16 Apr 24. saratogacountyida.org/wp-content/uploads/2024/05/IDA-4-16-24-Approved-Minutes.pdf

[xcix] “Petition Regarding Agreements for Procurement of Tier 4 Renewable Energy Certificates,” NYSERDA, Case 15-E-0302

[c] NYS PSC Transcript, April 14, 2022, p.101. dps.ny.gov/system/files/documents/2023/02/4.14.2022-albany-ny-monthly-meeting.pdf

[ci] “Economic Impact of Tax Incentive Programs,” PFM Group Consulting LLC, 23 Dec 30. tax.ny.gov/research/stats/statistics/policy-special/economic-impact/economic-impact-analysis.htm

[cii] Bordeleau et al. v. State of New York, nycourts.gov/CTAPPS/Decisions/2011/Nov11/190opn11.pdf