Open Letter Regarding Amazon
By New York State Budget Director ROBERT F. MUJICA, Jr.

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Written on February 22, 2019.

Budget Director for the New York State Division of the Budget Robert Mujica Jr.

ALBANY, NY — February 23, 2019 — “As just about everyone in this state, if not the country, knows by now, Amazon has terminated its plans to bring its second headquarters to New York State. It is a tremendous loss for New Yorkers and I hope that at a minimum, we understand the lessons learned.

“In my 23 years in the State Capitol, three as Budget Director, Amazon was the single greatest economic development opportunity we have had. Amazon chose New York and Virginia after a year-long national competition with 234 cities and states vying for the 25,000-40,000 jobs. For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs. People have been asking me for the past week what killed the Amazon deal. There were several factors.

“First, some labor unions attempted to exploit Amazon’s New York entry. The Retail, Wholesale, and Department Store Union (RWDSU) was interested in organizing the Whole Foods grocery store workers, a subsidiary owned by Amazon, and they deployed several ‘community based organizations’ (which RWDSU funds) to oppose the Amazon transaction as negotiation leverage. It backfired. Initially, Whole Foods grocery stores had nothing to do with this transaction. It is a separate company. While Amazon is not a unionized workforce, Amazon had agreed to union construction and service worker jobs that would have provided 11,000 thousand union positions.

“New York State also has the most pro-worker legal protections of any state in the country. Organizing Amazon, or Whole Foods workers, or any company for that matter, is better pursued by allowing them to locate here and then making an effort to unionize the workers, rather than making unionization a bar to entrance. If New York only allows unionized companies to enter, our economy is unsustainable, and if one union becomes the enemy of other unions, the entire union movement – already in decline – is undermined and damaged.

“Second, some Queens politicians catered to minor, but vocal local political forces in opposition to the Amazon government incentives as ‘corporate welfare.’ Ironically, much of the visible ‘local’ opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actuality organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not). Even more ironic is these same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application. They were all for it before Twitter convinced them to be against it.

“While there is always localized opposition, in this case it was taken to a new level. The State Senate transferred decision-making authority to a local Senator, who, after first supporting the Amazon project, is now vociferously opposed to it, and even recommended appointing him to a State panel charged with approving the project’s financing. Amazon assumed that the hostile appointment doomed the project. Of course the Governor would never accept a Senate nomination of an opponent to the project and the Governor told that to Amazon directly.  The relevant question for Amazon then became whether the Senate would appoint an alternative who would approve the project.

“As newspapers have reported, Amazon called the Senate Leader and asked if she would appoint an alternative appointee who would support the project.  The Senate would not commit to an alternative appointee supporting Amazon.  That was the death knell.  No rational company, or person for that matter, would assume the Senate would flip flop from appointing a staunch opponent of the project to appointing a supporter of the project.  It defies logic.  However, if that was their plan, Amazon needed a direct representation to that effect from the Senate.  It never came.  Indeed, to this day, the Senate has never said they would appoint a member who would support the project. Companies assume rational, logical behavior and cannot spend months and millions of dollars on approvals if ultimately the road is a dead end.

“Furthermore, opposing Amazon was not even good politics, as the politicians have learned since Amazon pulled out. They are like the dog that caught the car. They are now desperately and incredibly trying to explain their actions. They cannot. They are trying to justify their flip-flopping on the issue with false accusations that it was a ‘backroom deal.’ Let’s remember that as a condition of the competition, every bid was sealed to prevent governments from altering their bids to be more competitive. Empire State Development supported the numerous local applications in the state who wanted to bid for HQ2, but on the condition that the local elected officials and community supported it, and Long Island City was no exception.

“In working with New York City, we advanced Long Island City’s application with the signed support of the area’s local elected officials, including State Senator Mike Gianaris and New York City Councilman Jimmy Van Bramer. Both Gianaris and Van Bramer flip-flopped on this position after Long Island City was chosen, distorting the facts of the agreement and mischaracterizing the tax subsidies as ‘a cash giveaway.’ Now that Amazon has pulled out, local politicians are feeling the backlash from the project’s previously silent supporters and are dissembling. Local senators’ claims that their phone calls were not returned are particularly offensive, given that the local senator was the first person ESD President and CEO Howard Zemsky met with when we made the HQ2 announcement. I also remained in contact with him about the project as the State Budget Director, and he refused to sit on the community engagement board or even meet with Amazon representatives. Efforts were made to address legitimate concerns, all of which were ignored.

“Third, in retrospect, the State and the City could have done more to communicate the facts of the project and more aggressively correct the distortions. We assumed the benefits to be evident: 25,000-40,000 jobs located in a part of Queens that has not seen any significant commercial development in decades and a giant step forward in the tech sector, further diversifying our economy away from Wall Street and Real Estate. The polls showing seventy percent of New Yorkers supported Amazon provided false comfort that the political process would act responsibly and on behalf of all of their constituents, not just the vocal minority. We underestimated the effect of the opposition’s distortions and overestimated the intelligence and integrity of local elected officials.

“Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state ‘gave’ Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits – a program approved by the same legislators railing against it – would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don’t need to be the State’s Budget Director to know that a nine to one return on your investment is a winner.

“The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians.

“It was wrong to manage this issue as if it were a single legislator’s political prerogative on a local matter. This was not a traffic signal or local zoning issue. Losing the Amazon project was not just a blow to Queens County, it hurt the whole State from Long Island to the Capitol Region’s nanotechnology corridor to the emerging Panasonic plant in Buffalo, and it was a bad reflection on every single local elected official. Legislators must realize there is a difference between playing politics and responsibly governing.

“Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state ‘gave’ Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits – a program approved by the same legislators railing against it – would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don’t need to be the State’s Budget Director to know that a nine to one return on your investment is a winner.

“The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians.

“It was wrong to manage this issue as if it were a single legislator’s political prerogative on a local matter. This was not a traffic signal or local zoning issue. Losing the Amazon project was not just a blow to Queens County, it hurt the whole State from Long Island to the Capitol Region’s nanotechnology corridor to the emerging Panasonic plant in Buffalo, and it was a bad reflection on every single local elected official. Legislators must realize there is a difference between playing politics and responsibly governing.

SOURCE: New York State | Press Office

eHeziOpen Letter Regarding Amazon
By New York State Budget Director ROBERT F. MUJICA, Jr.

Comments 7

  1. 6.4 million New Yorkers can not understand this. They shout Barabbas when prompted. This is guy is wasting his time. And he is at least a corporate Marxist, which is different from an Evangelical Marxist.

  2. the budget director is right…New York lost 40,000 high paying jobs…Some other state will get the benefit..All because of Andrea Stewart Cousins and a vocal minority …..same problem for the rest of the nation…A minority in red states controls the agenda…SOMETHING HAS TO CHANGE

  3. Firstly as a public servant you should not be expressing any opinion about any deal, you shuold be seen and not heard.
    Secondly you state that you have been “budget director for 23 years” another huge problem for the crazy state of New York. No wonder we are heading of a financial cliff in the future.
    Thirdly, who put you up to this “press release”? Cuomo? Amazon?
    Fourthly, why does New York state continually give gigantic tax breaks to multibillion dollar corporations?
    Fifthly, how much revenue has the state lost in the last 23 years due to sweetheart tax breaks for the rich ?
    Sixthly, how come the state continues to bay vast sums for the likes of the Tapan Zee Bridge and the many MTA bloated projects? And how mush are these “overruns” and who profits from them, names and numbers please?
    Seventhly, It;s awesome to watch the likes of Cuomo and Deblassholio squirming over which side to take in this discussion. They are on the fence and pick and choose when it suits them. Of course they want Amazon, but only for election contributions next election cycle.
    Eightly, How come no one from either the Democratic Party or the Republican Party come out strongly against the constitutionally illegal tax breaks for the wealthy and wealthy corporations, ditto for the self serving Unions? If we are all equal according to the constitution, how come the rich and powerful are more equal than the rest of us? Supreme court case please!!!!!
    Ninethly, How come Mr. Mujica, that you are not questioning how come Amazon has paid no federal taxes in years? You know that when they don’t pay their fair share WE make up the difference?
    Finally, New York state needs to look at every tax break and social program from top to bottom and seek out the scammers and fraudsters, put the Dems will never do that.

  4. When asked about their position on unionization at Amazon, representatives for the company said that they would (quote) “crush” any efforts by its workers to form unions.

    For the past two years Amazon has paid ZERO federal income tax (it’s actually getting a rebate from the federal government) despite making $11.2 BILLION in profits.

    Amazon indicated that they would create 25,000 jobs over a 10-15 YEAR PERIOD, a statistical error for a company of its size and value. Its agreement and promises were also non-binding.

    Amazon chose New York and Virginia because of the access to Wall Street and Washington, the two centers of power in American society. Amazon already operates a cloud service for the US intelligence community, including a contract with the CIA, and also hopes to be the interface between all government buyers and all the companies that want to sell to government (Google it). Its proximity to Wall Street, had it settled in Queens, needs no additional comment.

    There are countless tax breaks and incentives that Amazon would have taken advantage of to reduce their tax payments to NY State, for example the Relocation and Employment Assistance Program ($900 million in lost tax revenue based on Amazon’s projected 25,000 jobs).

    While his workers are timed and tracked making minimum wage with zero job security and virtually no benefits, Bezos makes $4,474,885 an hour – the richest man in the world. Amazon routinely asks for and receives our money in the form of corporate welfare while it underpays its workers, which translates into more of our money being spent to cover its workers healthcare, food stamps, etc.

    Make no mistake: Amazon is a dangerous corporate monopoly that has concentrated tremendous power, wealth and influence across vast portions of American society. It is ant-worker, anti-union, anti-immigrant, anti-small business, anti-tax and ultimately anti-American since our great country was built on the sweat and graft of immigrants, unions and good old American entrepreneurism (and not government handouts like the ones that Amazon wants from states and the federal government).

    1. Corporations should not pay taxes. Corporations are owned by people who pay taxes. When corporations do well, we all succeed. When corporations fail, as they did during the 2007 Clinton/Cuomo recession, we all hurt.

    1. Mr.Mujica all you are doing is repeating what your boss Andrew “Lame Brains” Cuomo stated the previous day. Mr. Mujica what about the billions of dollars NYS lost in economic development over the past several years-yet again you work for guy who has never made a mistake in his 8+ years as the head of NYS-sure hope that the Crystal Run investigation in the Eastern District of NYS nails your boss-love to see him being marched out of his office in cuffs.

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