Lalor: No More Taxpayer Subsidies for the Gap

By Kieran Lalor, on Feb 14, 2017

Lalor: No More Taxpayer Subsidies for the Gap

East Fishkill, NY - (2/14/17) -  Assemblyman Kieran Michael Lalor (R,C,I - East Fishkill) is opposing the new tax subsidies for the Gap Inc. facility in Fishkill. The subsidies have been given preliminary approval by the Dutchess County Industrial Development Agency. A public hearing before the final approval is scheduled for February 17th. The hearing will be held at the Fishkill Village Hall at 9:30AM.

"Gap Inc. has already received millions in overly generous taxpayer subsidies from New York State and from local governments," said Lalor. "Enough is enough. What's to stop the company from coming back to the taxpayers again or picking up and leaving when business considerations dictate? Taxpayers shouldn't be expected to keep footing the bill for endless streams of corporate welfare. Ultimately, this will work as a tax shift, with other taxpayers picking up the bill. Gap Inc. should be applauded for keeping employees on the payroll after the fire, but it is worth noting that taxpayers already stepped in post-fire and gave Gap Inc. $2.65 million."

Gap Inc. applied for the latest subsidies after the facility's fire last year, but Lalor pointed to financial industry reporting that suggests Gap Inc.'s bottom line may have benefited from the fire. In a MarketWatch article from November 2016, analysts explained that the destroyed merchandise had not been selling well. MarketWatch quotes analysts as saying, "To oversimplify, it seems that not being able to sell the damaged product helped drive higher earnings than had the product not been damaged in the first place..."

Lalor continued, "Gap Inc.'s stock price went up after the fire. We shouldn't hand the company more tax dollars. New York needs across-the-board tax cuts that will benefit all New Yorkers, not more corporate welfare aiding a few select companies."

In 2014 Gap Inc. agreed to create 1,200 jobs and received $12 million from New York State in Excelsior Job Tax Credits, as well as a $7.9 million sales tax exemption from the Dutchess County IDA. Lalor has requested information from the IDA on Gap Inc.'s 2014 PILOT property tax deal. According to the IDA the average salary at Gap Inc. in Fishkill is $40,000, while New York taxpayers have given Gap Inc. subsidies totaling $28,012.42 per job. That number is reached by totaling the 2014 sales tax exemption, the 2014 Excelsior tax credits and the 2016 post-fire payment and dividing by the 805 full-time equivalent jobs the IDA reports at Gap Inc.'s Fishkill site. It doesn't include the 1999 and 2014 PILOT or sales tax and mortgage tax breaks given in 1999 when the facility opened. If Gap Inc. receives the latest $9.75 million tax exemption taxpayers will have subsidized the site at a rate of more than $40,124.22 per job.

Lalor concluded, "Given all the subsidies Gap Inc. has received already, this latest request is bordering on obscene."

 

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