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Are 'Hunger Games' money creating jobs? Reports raise questions

Report on "Hunger Games"

Over the last five years, hundreds of economic development projects have received billions in state money. Now, two reports suggest there's no real way of knowing whether jobs were actually created - and in some cases there's secrecy about how much money projects are getting.

In a You Paid for It Investigation, 13WHAM News learned that, while the comptroller's office audits school spending and town budgets, no one is doing the same for these economic projects funded with your tax dollars.

"That's the point," said Gates Town Supervisor Mark Assini, who has been outspoken about this issue.

In 2013, Muller opened its Greek yogurt plant in Batavia with a lot of fanfare and help from taxpayers, $15.5 million in incentives, tax breaks, and loans. Two years later, it closed - yet the company will not have to give back a portion of the money.

It keeps somewhere around $3 million, but even that is unclear. "We just don't know. We don't have that comprehensive audit that's required for everything else that uses public money," Assini told 13WHAM's Jane Flasch.

Money awarded through Governor Cuomo's regional competitions, dubbed "hunger games" by some, is funneled through the Empire State Development Corporation. A comptroller's report says that agency doesn't audit which programs are successful or provide a detailed report that would allow any outside agency to do the same.

In another report, the Citizens Budget Office says only 15 percent of the Finger Lakes projects that received funding in 2012 had, by two years later, created the promised jobs.

Lt. Governor Kathy Hochul said the number is misleading because the projects receive funding a little at a time over five to 10 years for meeting certain projections. The jobs are added the same way. "I think that's where we get impatient," Hochul said. "The jobs are promised. They're coming, but it takes time to put a building in and do the hiring."

Another criticism: The CBO says the total funding of half of the Finger Lakes projects from 2012 was never disclosed. And while a meeting held Thursday was open to the public, most of the decisions are made behind closed doors.

Finger Lakes Development Co-Chair Joel Seligman explains it this way: "It's mostly to get people to talk candidly. We have 70 projects, not all of them will be supported." He said those evaluating the merits "need to be honest and comfortable talking about them and then they have to defend what they do publicly."

The Comptroller's report also points out the large amount of borrowing going on to fund these projects. The state finances the loans given to individual companies. The interest and fees add up to 37 cents on the dollar.

The "backdoor borrowing is conducted on behalf of the state with no requirement for approval," said the report.

You can see the Comptroller's report here.

You can see the Citizens Budget Office report here.


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