Amazon HQ was touted as big win for NYC, but math is more complex

New York officials NEW YORK — tout their deal to land a new Amazon headquarters as can’t-miss math. The city and state put up $2.8 billion in tax breaks and grants. In return, they get an economic engine expected to generate $27 billion in new tax money over a quarter-century.

“This is a big moneymaker for us. Costs us nothing,” Gov. Andrew Cuomo said when the agreement was announced.

Experts say the economic equation isn’t that simple.

The state’s predicted 9-to-1 return on its investment was based on a widely used economic model that compares the costs of tax incentives with expected tax gains, but it didn’t factor in the substantial costs of accommodating Amazon’s growth in the city, researchers said after reviewing the documents.

The city and state will have to spend money to educate the children of workers, improve public transportation to get them to work, collect their garbage, adjust police and fire coverage, and provide all sorts of other services.

“Claiming 9-to-1 isn’t just implausible. It is a dishonest way to present the return on these incentives,” says Nathan Jensen, a University of Texas professor of government who has been critical of the way economic development incentives are used.

The reports also don’t measure the Amazon “HQ2” project against any other possible development of its intended site in the booming Long Island City neighborhood.

Four academic and think tank researchers who weren’t involved in the state’s cost-benefit analyses said that while its methods were standard, its scope was limited.