Takes Issue with Tax Breaks to Large Corporations
By Conor Greene
With the economy clearly the main issue for voters, Councilman Joseph Addabbo is making funding for small businesses a major issue in his race for the State Senate.
The main target of Addabbo (D-Howard Beach) is a state program providing hundreds of millions of dollars in tax breaks to companies, including major corporations, which he says needs to be reformed. The tax breaks, provided under a program called ICIP, don’t come with requirements that the company create quality jobs that pay decent wages and provide benefits.
Addabbo, who is challenging longtime Senator Serf Maltese (R-Glendale), held press conferences recently in Ridgewood and Maspeth to focus on issues he has with the program. To highlight the program’s inequities, he recently joined business owner Howard Mishler of Ay-Host Paper Company outside a Hess gas station which receives$13,761 in ICIP subsidies.
“My business is suffering because of outsourcing and a bad economy, but a big international corporation like Hess gets close to $14,000 to stay in the neighborhood,” said Mishler. “I have been here for thirty-eight years, employ local people and give back to my community. Gas is nearly $5 at the pump and the oil companies are busy lining their pockets at my expense. Our tax dollars and representatives should be working for us, and they’re not.”
Addabbo noted that a recent report by the Center for Urban Future found that while the 15th senate district is home to almost half of the Queens businesses receiving ICIP money, the area still includes three of the lowest performing zip codes for economic growth: Ridgewood, Middle Village and Woodhaven.
In contrast, neighborhoods in south Queens, including areas Addabbo represents as a councilman, have seen employment increases of 80%.
According to the Center for an Urban Future report, Middle Village has seen an 8% decline in employment, while Ridgewood has been hit twice as hard, with a 16% decline in employment. While some areas in the northern portion of the district have seen strong economic growth, such as 15% in Maspeth, it still pales in comparison to the southern portion of the council district represented by Addabbo, which includes Ozone Park (80%), South Richmond Hill (49%) and Howard Beach (20%).
“I’m proud that my council district has seen record growth, but I’m concerned about our neighbors to the north,” said Addabbo. “It’s appalling that the state continues to offer incentives to corporate entities while family owned businesses close their doors. We need to end corporate tax breaks for companies which outsource jobs and detract from our tax base. In these tough financial times we cannot afford to lose millions of dollars in revenue.”
While the state legislature approved a bill reforming the ICIP program in June at the urging of Mayor Michael Bloomberg, it failed to address the underlying problems of ICIP by continuing to permit corporations to receive subsidies, the Addabbo campaign argues. The candidate cited a report by the Manhattan Borough President that found that 75% of companies receiving ICIP funding would have proceeded with their projects regardless of the subsidization.
Addabbo continued with the economic theme last Friday at a press conference outside the Comfort Inn on Maurice Avenue in Maspeth. Joined by members of several union groups, he bashed the program for providing funding to numerous hotels that employ nonunion workers. The Comfort Inn receives $237,644 in ICIP tax breaks according to Addabbo, who noted that 92% of Queens hotels enrolled in the program are non-union.
“Currently, there is no oversight of the ICIP program to ensure job creation, nor des the legislation require that companies pay employees a living wage or provide benefits,” said Addabbo. “We need to both grow the economy and lower the cost of living by providing good jobs that offer health benefits, fair pay and pensions. Albany is essentially bankrolling these projects, many of which are of questionable value, on the backs of working families.”
Addabbo argued that the hotel industry exemplifies many of the problems with the ICIP program, including its lack of discretion and lack of job quality requirements. “Because ICIP is an as-of-right program, with no discretion for local elected officials, there is now no opportunity to decide if a given project is worth subsidizing,” the Addabbo campaign noted.
Maspeth resident Laura Tapia, who is a RWDSU organizer, said that Addabbo is needed in Albany to support workers with living wages. “When elected officials like Serf Maltese vote against raising the minimum wage [in 2004], he hurts all workers,” she said. “And when elected officials like Serf Maltese don’t mandate that businesses receiving subsidies from programs like ICIP pay living wages and benefits, it hurts all workers.”
The ICIP program cost the city $512 million in taxes it otherwise would have collected in 2008 alone, according to the Addabbo campaign. That is more than double the $190 million that the program provided in tax breaks in 2002.
The Maltese campaign did not respond to a message seeking comment on the Senator’s views on ICIP and small business.