Bill de Blasio is rarely accused of shilling for business, so maybe as mayor he’ll do New Yorkers a favor — by putting an end to City Hall’s habit of handing out taxpayer alms to commercial ventures.
Plainly Mayor Bloomberg has no plans to stop the practice before leaving office. His team has just announced yet another outlay of taxpayer cash to “boost” businesses — this time, in the “life-sciences sector.”
As part of the city’s “Early-Stage Life Sciences Funding Initiative,” Hizzoner is dumping $10 million into a fund for small firms and start-ups working on new medical treatments. City Hall hopes to lure other investors to raise this seed money to $100 million. Already the fund is up to $50 million, thanks largely to contributions from firms such as Celgene, GE Ventures and Eli Lilly.
True, $10 million isn’t a lot for a city with a $70 billion budget. But the new plan comes at the end of a long line of public investments in private enterprises, from Yankee Stadium to the Barclays Center. (And on top of $1.7 billion a year in tax incentives from Albany, including $420 million in subsidies to a “destitute” film industry).
Officials justify the latest outlay of public dollars by saying they are aimed at making New York a “capital for life-sciences innovation.” The city now trails other places in this field, and the private sector has been slowing its own investment in it.
But that should raise a red flag: What is it about the biotech market, or New York’s business climate, that discourages investors from risking their own cash absent handouts from bureaucrats? What do business folks know that bureaucrats don’t?
And don’t buy the rosy promises that these taxpayer funds will pay off in terms of new economic activity, more jobs and greater tax revenue. The evidence for this is exceptionally weak, not least because such results are hard to measure (especially if you try to factor in opportunity costs).
The way to promote business and attract investment is to lower taxes, lighten regulation and insist on equal treatment for all. Of all people, Bill de Blasio should recognize that the subsidy game promotes a tale of two cities — with the glamorous and politically connected making out at the expense of the Ordinary Joes.