As Election Looms, Cuomo Announces $750 Million To Green Energy Billionaire
New York state has caved to the charms of green energy billionaire Elon Musk, announcing $750 million in subsidies to help Musk build a SolarCity GigaFactory in the western region of the state.
Just a month before New Yorkers head to the polls, Democratic Gov. Andrew Cuomo has announced the solar panel leasing giant SolarCity will be building a new facility on property owned by the State University of New York’s College of Nanoscale Science and Engineering. The move is part of Cuomo’s START-UP NY program — a scheme that gives out-of-state or expanding businesses ten years of tax freedom for partnering with state colleges.
“This is bigger than anything we could have imagined,” Cuomo said in a statement. “It is the perfect metaphor for Buffalo, where the fundamental strength was the available hydropower. That hydropower now, that renewable energy now, will fuel the renewable energy industry for the future.”
Cuomo’s office says SolarCity will spend $5 billion over the next ten years to help build a GigaFactory and create 5,000 jobs across the state. But first, New York taxpayers will be paying hundreds of millions of dollars to subsidize the project.
Cuomo is currently up for reelection and looking to shore up his support across the state. The governor currently enjoys a sizeable lead over his Republican opponent Rob Astorino, but his popularity in upstate New York has been fickle as the region’s economy continues to struggle and people leave the region.
START-UP NY was Cuomo’s answer to upstate’s woes. The plan aims to turn state college towns into hi-tech hubs as new companies team up with universities. Out-of-state and expanding companies that join the program don’t have to pay taxes for 10 years — an unwelcome development to established state business owners.
“Gov. Cuomo’s Start-Up NY is crony capitalism that gives well-connected companies tax-free status while leaving everyone else out,” said state Assemblyman Bill Nojay. “A truly bold economic development plan would lower New York’s highest-in-the-nation taxes and roll back New York’s oppressive regulations.”
“If START-UP NY is good for a few, selected businesses, why not offer it equally to all businesses?” Jonathan Williams, director of tax policy at the American Legislative Exchange Council, told WatchdogWire. “States get into dangerous territory when they attempt to micromanage the economy and pick winners and losers through the tax code. A much more effective approach is to provide competitive tax rates to all businesses and individuals.”
Even New York public employees opposed the program because it would cost the state valuable tax revenues used to pay for pensions, health care and other employment benefits. It would also exempt workers at these new business from paying state income taxes, meaning workers already in the state will have to pick up the tab.
Everyone agrees that we need to create more jobs in New York State, but even if Start Up NY succeeds in that regard, the cost will be a diminishment of the already scant equity and progressivity that exists in the current tax code,” said Mario Cilento, president of the New York State AFL-CIO. “Individuals granted favored status under the proposal, as well as their families, will consume state services, but unlike other New Yorkers will be exempt from helping to pay for them; that’s just not right.”
Cuomo To Spend Billions On Solar Energy
This is not Cuomo’s first forray into pumping up solar energy. Earlier this year, the governor announced $1 billion in funding over the next decade to boost rooftop solar energy production.
Cuomo plans to subsidize 3,000 megawatts of solar over the next decade — a cost to taxpayers of $333,000 per megawatt of solar power. Cuomo, however, argues that his subsidies should boost the solar industry to the point where it no longer needs state support.
Doubtless Cuomo believes attracting SolarCity to New York will help him realize his goal of boosting rooftop solar generation across the state.
Critics have slammed Cuomo’s solar plan, and pointed to the state’s vast reserves of natural gas which are blocked off due to a statewide moratorium on hydraulic fracturing, or fracking.
A 2011 study by the conservative Manhattan Institute found that lifting the fracking moratorium could create 18,000 jobs in upstate New York, which sits atop the Marcellus shale. A further 90,000 jobs could be realized in Southeastern New York if drilling is allowed on the Utica shale formation.
Trying To Imitate Nevada
Cuomo’s big giveaway to SolarCity comes shortly after Nevada approved a $1.3 billion in state subsidies to entice Tesla Motors to build a GigaFactory in the state. Nevada’s state lawmakers convened a special session to pass Tesla’s benefits package.
Tesla is Musk’s high-end electric car company that got $465 million in seed funding from the Obama administration as part of its green energy loan program. The company has enjoyed success as well as some celebrity endorsements — “Game of Thrones” author George R.R. Martin drives a custom-made purple Tesla.
But Tesla and SolarCity are just the tip of Musk’s government-backed business empire. The Paypal founder’s spaceflight company SpaceX reportedly got a lucrative contract from NASA to shuttle astronauts into space.
Musk’s newest venture in western New York means he will be getting another $750 million of taxpayer funds to build his business empire. According to Bloomberg, Musk is worth $11.7 billion dollars — his personal wealth grew almost 50 percent this year alone.
SolarCity is the world’s largest rooftop solar panel leasing company with a market cap of $5 billion. The company has benefited from generous federal and state solar subsidies, which they reap through leasing solar panels to people who then install them on their roof.
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