CM Maloney questions OMB on business formation decline and tax incentive analysis

Okay, Councilwoman Maloney.

Thank you for being here.

Thank you.

I have some questions around economic development.

The EDC's economic snapshot from May 29th was generally upbeat, but net business formation was down 4,000 year over year and down 1,000 from the previous quarter.

And more businesses have closed than new businesses were formed.

In your assessment, what is causing the net business closure in New York?

And I'll do a rapid fire for time.

Are there specific industries that are struggling more than others?

And how does the administration's priorities supporting small businesses and economic growth are incorporated in this budget plan?

Sure.

So thank you for your question.

And overall, I mean, I think we're...

Clearly, we're going to work with and have been working with EDC to drill down on the challenges related to the business community.

I think that when you look at the executive budget and what we've been able to do with small business services,

providing the support there, whether it's the best B-E-S-T for the acronym that we have for the engagement with the small businesses

for services to be provided that we invested in the preliminary plan.

We also invested for small business services now in terms of the commercial lease assistance, as we talked about.

We talked about the right to counsel.

So, and obviously funding them for their efforts on mobile food vending.

So we are being able to focus on small businesses writ large.

I mean, I think that overall we are looking at

Again, the investments that we have in the universal child care space.

We are looking at the affordability agenda, the housing plan, the block-by-block housing plan, where you're talking about the creation of 30,000 construction jobs.

You're talking about the creation of permanent 12,700 jobs.

In terms of operations of housing.

So there are a number of ways that we can support job creation and businesses within the city through our affordability agenda and our focus there.

Thank you.

Has OMB conducted any analysis on the efficacy of incentive programs that we have for business relocation taxes like RACE or REAP and what that has done for revenue of the city?

Have you considered expanding?

Forming or replacing any of those models?

Do we have a sense of what businesses have been bringing revenue to the city?

Just that line of questioning.

Yeah, absolutely.

I mean, we are looking at those.

I think it's prudent to look at those, to take a fresh look, you know, coming in.

I know that many of these incentive programs have existed for many, many years, and they are extended at, you know, four years, you know, in four-year intervals of late at least.

So we need to look at sort of the original sort of the inception and the

value proposition when they were first created, what they have produced for economic development, what kind of industries have thrived under those or which industries have not, which industries need the incentive.

And where across the city does it make sense?

So we are looking at that.

We will look at that with the Economic Development Corporation and with the Department of Finance as well.

And which CSO, if any, is in charge of reviewing savings and how we structure those tax breaks for economic development but also for housing?

So on the economic development piece, well, obviously, you know, there is a chief savings officer with respect to EDC.

But when we talk about the effort to look at the tax incentives, it's cross-cutting across many different portfolios.

And so the Office of the First Deputy Mayor.

and OMB with the respective agencies that this may impact are all looking at these together.

You could have situations as well where there is an incentive that impacts a particular industry, whether it's manufacturing, et cetera.

So we have to look at where other portfolios will invite them in to be able to look at those as well and get that perspective.

So it is a multitude of different parties that will come to this conversation.