Case Study: Taxing, Spending, Education, and Development Assignment as a New York State Legislator

As a New York Legislator, a solution must be formulated to utilize the data newly released from the Bureau of Labor Statistics (BLS) to combat the detrimental ailments that plague this state’s economy. The specific challenges facing this state include its revenues, currently at $10.2 Billion; while its outlays sit at $10.3 Billion—leaving New York with a $100 Million deficit. Now, this State must find a way to alleviate its $100,000,000 structural deficit and fulfill the expectations of its stakeholders. But in its current form, millions of New Yorkers remain unemployed without any prospect for work. Worse, many of these individuals remain unskilled and without the means to receive higher education.

The over four million New Yorkers within the five boroughs of New York City unable to find work cannot be expected to indefinitely rely on government welfare and unemployment benefits; as the pandemic era is now over (BLS). Government assistance is designed to be temporary; it is thus, the duty of the State to ensure a state of commonwealth and provide a pathway for the citizenry to rise above prolonged incurrence of socioeconomic detriment. Nevertheless, the State needs both the creation of new jobs and a focus on its economic prosperity, following the mass closures that occurred throughout the pandemic.

As a New York State Legislator, my focus in technology, specifically microtechnology; my vision bears a remedy that can bring resolution to the State’s persisting crisis. The Consumer Price Index report data released on October 10^th, 2024 shows “[t]he Consumer Price Index for All Urban Consumers (CPI-U) in the New York-Newark-Jersey City area increased 0.4 percent in September,” (BLS). Moreover, the U.S. Bureau of Labor Statistics reported that “[o]ver the last 12 months, the New York area all items CPI-U rose 3.8 percent,” (BLS).

As the lobbyists persist in their demands to open a new high-tech facility; the teacher’s union is demanding a 1% raise. To appease both conflicting parties simultaneously with a single cohesive action; the correlative values sought by each party must be addressed. Within the concurrent sphere of disparity shared by both the teacher’s union, and the public; there lies only one cogent solution to this dilemma.

Solution

Specifically, New York must implement a two-pronged solution: (1) the construction of a high-tech campus specializing in microchip engineering, namely the New York Semiconductor Academy (NYSA); whilst (2) the commencement of construction for a semiconductor manufacturing facility that is directly connected to the campus, namely the New York Chip Factory (NYCF).

New teachers will be required for this position, thus satisfying the demand of the Teacher’s Union. This State ought not forget the very union responsible for recent cutting-edge innovations in education; may this be the next forefront of their endeavor. Conversely, the economy is down, and unemployment is up. New York Teacher’s Unions are a vital pillar of support, foundational to this state and its local communities. The New York State Union of Teachers reports that the “NYSUT is a federation of more than 1,200 local unions, each representing its own members. We are affiliated with the American Federation of Teachers (AFT) and the National Education Association (NEA),” (NYSUT). Thus, a prominent force that must be properly positioned, and supported to enable the highest possible grade of education for New Yorkers. The American Federation of Teachers (AFT) writes that “The essentials of good education are the same everywhere: a rigorous curriculum, effective instruction, adequate resources, willing students, and a social and cultural climate in which education is encouraged and respected,” (AFT). This position is undisputable. The AFT adds that “[t]eacher unions today, as in the past, must work to make these essentials available in every district for every school and every student,” (AFT). Therefore, this state must utilize the good nature of this organization to assist in the state’s efforts to formulate an educational standard.

To remedy the conflict in duality between the request of the teacher’s union and the state’s deficit, work will be facilitated through seven methods of job-creation and employment: (1) the construction of the school and chip manufacturing plant; (2) sourcing local businesses for resources required for its establishment; (3) the teaching staff required to instruct the newly created campus; (4) workers to carry out the manufacturing of microchips, its maintenance, and conduct oversight of the facility; (5) business executives to facilitate trade agreements on parts; (6) policymakers to enact standards; (6) a legal staff; (7) providing jobs for every other conceivable sector of the campus and microchip manufacturing plant, (e.g. admissions, advertising, marketing, performance standards, recruitment).

Cost Benefit Analysis

The predicted benefits greatly outweigh the total costs. The majority of these expenses will be subsidized by State and National grants to facilitate the create of these facilities. This will boost the surrounding economy, with eventual extension of these benefits unto the entire nation. The old collective bargaining agreements (CBAs) needs to be reevaluated, as the Teacher’s Union is expecting an increase in their appropriations. Although 1% seems modest, it is significant considering the state’s current deficit. But this increase in costs can be near eliminated in exchange for program compliance. The state has already allocated appropriations for a microchip initiative, and these benefits would allow for us to grant the 1% increase demanded. Further, it would ensure this policy initiative receives federal grants set aside for microchip green initiatives. By utilizing these economic tools, the state could reduce its financial burden and honor the Teacher’s Union’s request. Author Ann Bowman notes, “[r]esearch has shown that, in some places, at some times, some economic development tools produce the intended outcomes,” (Bowman & Kearney, p. 381).

Beyond environmental factors; economically, there would be five primary tax benefits gained in working with the states, specifically in its interests to secure a domestic microchip market. To achieve this, every objective must remain compliant with the necessary qualifications.

These earned tax incentives would be:

(1) “Investment Tax Credit: Up to 5% of project capital expenditures;”

(2) “R&D Tax Credit: Up to 8% of R&D expenditures;”

(3) “Salaries and Wages Tax Credit: Up to 7.5% of salaries and wages expenditures (only applies to first $200,000 of salaries and wages per net new job, to be adjusted for inflation by 4%+);”

(4) “Real Property Taxes/PILOTs Tax Credit: Eligible for schedule of credits based on amount of real property taxes/PILOT paid (50%, 45%...5%) over 10 years (only applies to one 10-year term);” and

(5) “Discounted Utility Service Delivery Rates: Discounted utility service delivery rates conveyed via private utility;” (ESD.NY).

Funding

One viable source of funding, the National Science Foundation’s (NSF) H.R. 4346 – CHIPS and Science Act is offering $280 Billion in grants, to assist with the national semiconductor shortage. The NSF writes that “[t]he NSF shall make awards under the Scientific and Advanced Technology Act of 1992 to support programs for skilled technical workers in STEM disciplines that are aligned with skilled workforce needs of the microelectronics industry,” (Congress). The National Science Foundation’s CHIPS and Science Act (H.R. 4346) adds that these disciplines must “lead to an associate's degree, or equivalent certification, by providing funding and other assistance, including opportunities for internships and other hands-on experiences in industry,” (Congress). Author Ann Bowman similarly notes that “[i]nitial research findings suggest that grants and loans in support of technology development can increase an area’s share of high-technology employment,” (Bowman & Kearney, p. 381). Thus, the NSF’s H.R. 4346 is a viable candidate for attaining the necessary grants to properly execute this policy initiative.

New York State has led the way for microchip innovation, becoming the first state offering “up to $10 billion in economic incentives for environmentally friendly ‘Green CHIPS’ semiconductor manufacturing and supply chain projects—alongside a host of shovel-ready sites, cutting-edge R&D infrastructure and a talented workforce (ESD.NY). The Empire State Development writes further that “New York State offers the semiconductor industry the nation’s most compelling advantages for doing business here;” making this initiative a viable prospect, (ESD.NY).

Additionally, New York State offers a tax credit program for all semiconductor chip manufacturers that meet specific state requirements. The Empire State Development (ESD) writes of New York State’s Green CHIPS Program, that any “Green CHIPS projects that meet certain eligibility conditions and achieve their promised job and investment commitments will be eligible for significant levels of fully refundable tax credits under Empire State Development’s Excelsior Jobs Program, a pay-for-performance program in which companies receive tax credits as they meet annual job and investment commitments,” (ESD.NY).

Eligibility. To qualify, this policy initiative must meet the following specific criteria:

(1) “Create at least 500 net new jobs and make at least $3 billion in investment per each 10-year project term, with eligibility for up to 20 years of project incentives;”

(2) “Adopt sustainability measures to mitigate the project’s greenhouse gas emissions;”

(3) “Pay federal prevailing wage rates for project construction;”

(4) “Commit to worker and community investments, including through training and education programs to expand employment opportunity for economically disadvantaged individuals”

(5) Our “Green CHIPs projects must complete Community and Sustainability plans in order to be eligible for the credit. ESD has drafted templates for these plans.”

Once qualifying, the structural deficit would likely be resolved. Plus, the obstacles to achieve the desired outcome objective would be lessened, as this initiative ought to consider its long-term sustainability measures and gas emissions. This action would produce a second-order benefit; ensuring the New York Semiconductor Academy (NYSA) and New York Chip Factory (NYCF) do not infringe of the environment anymore than its level of current pollution. By avoiding the incurrence of additional pollutants this initiative can preclude fines, fees, and public discord. New York is the central hub of innovation; as a result air quality due to environmental pollution is regularly cited as a persistent problem. Complying with the Green CHIPs project initiative would ensure that (1) the necessary funding is attained; (2) jobs are created; (3) the economy is improved; (4) the community is offered greater education; (5) the environment remains unperturbed.

If this evidence is not compelling enough, the U.S. Department of Commerce’s (DOC) National Institutes of Standards and Technology (NIST) has a Chip Incentives Program Chips for America. Similarly, the DOC’s NIST has a direct application “portal to apply for CHIPS Incentives . . . The CHIPS Incentives Program can provide direct funding (via grants, cooperative agreements, or other transactions), loans, and loan guarantees (collectively, ‘CHIPS Incentives’) for eligible projects,” (Chips.gov). This federal program would provide this initiative with a grant, further subsidizing the structural deficit of $100 Million.

Prerequisites. There exist four prerequisites to attain federal funding; to be eligible this program must:

First, (1) attain the status of a “covered entity;” as “[f]unding is available only to ‘covered entities.’” Here, the term covered entity is defined by the State of New York as “private entities or consortia of private and public entities that can demonstrate the ability to substantially finance, construct, expand, or modernize an eligible facility,” (NIST).

Second, (2) gain funding reserved to be allocated to covered entities; “to incentivize investment in facilities and equipment in the United States,” (NIST). This will be utilized “for the fabrication, assembly, testing, advanced packaging, or production of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment,” (NIST). Not only will this step conform this initiative to the federal requirements, but it will produce a wealth of jobs by creating employment in the construction and utilization of a cutting-edge microtechnology campus and semiconductor engineering facility.

Third, (3) appropriate (a) “funding . . . for the construction, expansion, or modernization of facilities of the kind described in Section I.B.1.6F. For the purposes of this NOFO, construction means the construction of a new facility.” (NIST). This advantages the proposed policy by ensuring its new facilities would be created. A secure proposal must be established before submission to the National Institutes of Standards and Technology (NIST). The NIST adds that the proposal should factor expansion and modernization, adding that (b) once these facilities are constructed, its “[e]xpansion or modernization [may include], for example, significantly enlarging an existing facility, increasing the capacity of an existing facility via a material capital investment,” (NIST). This can be achieved by “adding a new production line, and upgrading an existing facility, such as to a new node or converting a facility from another use,” (NIST).

Fourth, (4) the NSF requires “the CHIPS Act specifies that the covered entity must have” five additional factors. These include:

(a) “a documented interest in constructing, expanding, or modernizing an eligible facility;”

(b) “an ‘executable plan,’ i.e., a plan reasonably capable of successful implementation, to sustain the facility without additional funding from the CHIPS Incentives Program;”

(c) “documented its workforce needs and produced a strategy to meet such workforce needs as well as the aforementioned commitments to worker and community investment;”

(d) “determined the types of semiconductor technology it will produce at the proposed facility, and the customers, or categories of customers, to whom the items will be sold;”

(e) “developed an ‘executable plan’ to identify and mitigate relevant semiconductor supply chain security risks;” and “[h]ave policies and procedures to combat cloning, counterfeiting, and relabeling of semiconductors, as applicable,” (NIST).

Further, this action will give lobbyists the opportunity to opt in their resources; thus centralizing their efforts on bolstering the state’s education system. Like the crisis of poverty, there has been a strong grassroots response to address New York’s persistent education crisis. As a legislator, this state initiative will strives to correct both crises imposing concurrent problems upon society—using a single two-pronged solution; construction of the New York Semiconductor Academy (NYSA) and the New York Chip Factory (NYCF).

Construction

Campus Construction. The New York Semiconductor Academy (NYSA) will require direct funding to construction workers within the community, improving the economy through investment. The approximate cost of the construction of a campus in New York is $600 Million; referencing the costs of the John Jay School of Criminal Justice, (Archives)—factoring the rise of inflation into the cost, alongside the current strain on the economy—this figure would be closer to $1 Billion. But this ought not deter the State from considering such prospects; as the majority of this would be subsidized by the governor and the national government. Moreover, this campus would cater exclusively to all areas of semiconductors, offering a wide range of degrees from chip design, to engineering, to marketing.

Manufacturing Facility. New York Chip Factory (NYCF) may likely source the majority of its funding from government grants, should this initiative comply with the necessary prerequisites. One example the John Jay College (JJC) Building Expansion Project, featured a “625,000 gsf multi-use building . . . [with] classrooms and lecture halls, modern forensic science labs, instructional and research laboratories, faculty offices, student activities and academic support services, administrative offices, and campus services;” costed in total $632,300, (CUNY). Therefore, to construct the New York Chip Factory (NYCF)—factoring the rise of inflation into the cost, alongside the current strain on the economy—this figure would be closer to $1 Million. This needn’t deter the pursuit of this construction, as the return will be far greater; and the initial investment will also likely be subsidized by some form of grant.

Empirical Support

Beyond education, the high-tech semiconductor manufacturing facility will need operators for the chipmakers fabs (fabrication facilities). ASML Foundation reported before its closure in 2023 that, “[t]he microchip manufacturing process involves hundreds of steps and can take up to four months from design to mass production,” (ASML). This approximate timeframe will give three seasons of innovative designs released annually. The ASML adds that maintenance, compliance, and regulatory oversight will be another important factor as “[i]n the cleanrooms of the chipmakers’ fabs (fabrication facilities), air quality and temperature are kept tightly controlled as robots transport their precious wafers from machine to machine,” (ASML). The foundation notes further that resources will need to be supplied, “[t]he air inside a cleanroom is filtered and recirculated continuously, and employees wear special clothing (sometimes called ‘bunny suits’) to help keep the air particle free,” (ASML). All of this will take training and require consistent attention; thus producing new job openings that previously were not available to those willing to undergo the necessary training. New York’s Purdue University reports that “[a] 2017 survey conducted by Deloitte and SEMI found that 82% of semiconductor industry executives reported a shortage of qualified job candidates and there is expected to be 70,000 new jobs by 2026,” (Purdue). Moreover, our technology campus will be located on the same property as the microchip facility; featuring a variety of semiconductor industry-specific degrees. The MRL Consulting Group affirms that “[t]he semiconductor industry offers various jobs and career opportunities. From designing intricate circuits to overseeing manufacturing processes, there's a role for every skill set,” (MRLCG). These specific roles include: “[n]anotechnology researcher; [p]rocess integration engineer; [e]quipment technician; [p]roduct marketing engineer; [e]quipment engineer; [q]uality control technician; [s]oftware development engineer; [m]achine learning engineer; [s]ales representative; [and a]ccount Manager,” (MRLCG). Therefore, the establishment of an exclusive campus dedicated to the semiconductor industry will incentivize the citizenry to embrace these roles.

Biblical Evidence

As we are reminded by the Apostle Paul in The New Testament, it is not economic status, education or ethnicity that matters—every man has the ability to fulfill the task God has created them for. Paul scribes, “[f]or you have acquired new creation life which is continually being renewed into the likeness of the One who created you; giving you the full revelation of God.” (Colossians 3:10; TPT). Thus, man ought to remove any discriminative barriers that prevent him from fulfilling this decree. Paul adds that wealth, ethnicity, nationality, and education are a worldly concepts, writing; “[i]n this new creation life, your nationality makes no difference, nor your ethnicity, education, nor economic status— they matter nothing. For it is Christ that means everything as he lives in every one of us!” (Colossians 3:11; TPT).

Moreover, Jesus’s brother, James, scribed a testament of to remind us the value of faith; concluding that a man’s actions are futile without his willingness to embody the role; thereby walking through the doorway He opens during our worldly trials of fire. This appearance of bravery will serve as witness God’s presence as He shield us from death and destruction. This is the hour that we are positioned to embrace the role as Legislators He has tasked upon us. Therefore it is my belief that the proper stewardship of the state’s resources will enable us to advance the prosperities for this generation of citizens and New York’s posterity. Specifically, James (Jesus’s brother) wrote “[j]ust as the body is dead without breath, so also faith is dead without good works” (James 2:26; NLT). It would be a testament of faith by this state’s legislators to invest themselves into the education of its citizenry, and ensure that it produces consistent fruits for their labor. But the condition of the soil and its contents must be considered; “[d]oes a spring of water bubble out with both fresh water and bitter water? Does a fig tree produce olives, or a grapevine produce figs? No, and you can’t draw fresh water from a salty spring,” (James 3:11-12; NLT). This doctrine of implementing a faith-based foundation can be recognized through the efforts of this policy initiative, whilst conforming to the framework of clean energy semiconductor manufacturing. This will preclude environmental infringements, simultaneously maximizing immediate profits, further facilitating a long-term strategy. Therefore, a sequence of actionable steps must be taken.

Actionable Steps

First, we must “submit a Green CHIPS Community Plan to ESD [Empire State Development] for approval,” (ESD). This Community Plan must include “training and education benefits paid by the participating employer to support regional workforce development and employment opportunities for New York State residents, including economically disadvantaged individuals,” (ESD). Durationally, “[p]lans should indicate the duration of activity, such as a 10-year plan and/or a 20-year plan (if seeking a Phase II),” (ESD). Moreover, is important that every element is clearly noted for this Community Plan, to remain eligible for its funding. Specifically, these elements include: (1) “employment opportunities for diverse and disadvantaged populations;” (2) “commitments to diverse business contracting and utilization;” (3) “commitments to workforce pipeline development;” (4) “workforce support services;” (5) “community engagement;” and (6) “academic engagement,” (ESD.NY). This initiative possesses these qualities; and—as this proposal aims to display—more.

An important subpoint on Academic engagement; Empire State Development (ESD) requires that all proposed Community Plans “include specific opportunities for partnership and collaboration with regional higher education institutions and could include engagement with other higher education institutions ell across New York State,” (ESD.NY). The construction of the New York Semiconductor Academy (NYSA) and New York Chip Factory (NYCF) will offer its technology to all State Universities; ensuring that all New York classrooms have the latest cutting-edge technology; despite the current national semiconductor shortage. Ultimately, this policy initiative will possess the means of supplying the needs of educators across the nation, in addition to other state interests. This policy initiative has the potential to revolutionize the nation—starting on a State level. New York often sets the trend for policy reform throughout this nation, as history has shown. It is the hope of this legislature that this policy initiative and its objectives will be considered and actualized for the benefit of New York State’s posterity. The time is now to take the opportunity given by the State and national government and increase the quality of life for New York citizens.

Conclusion

In conclusion, this policy must ensure that it fulfills the obligations to the public has entrusted to this state’s legislature. The construction and operation of the New York Semiconductor Academy (NYSA) and New York Chip Factory (NYCF) will fulfill these duties. Its existence will meet these omnidirectional requests from various organizations and institutions revolving around the central issue of the state’s economy; by achieving the following objectives: (1) reforming this initiative to comply with the regulations of the state’s microchip grant programs—namely the U.S. Department of Commerce’s (DOC) National Institutes of Standards and Technology’s (NIST) Chip Incentives Program—Chips for America, the Empire State Development’s (ESD) Green CHIPS Program, and H.R. 4346—the National Science Foundation’s (NSF) Chips and Science Act; (2) revising and submitting the proposals to the state; (3) getting the initiative approved for state grants to gain funding for the project; (4) getting approved for tax incentives, thus reducing the state’s deficit, and enabling the (5) reassessing a revision of New York’s collective bargaining agreements (CBAs), thus honoring the teacher’s union’s request of an increased 1%; (6) utilizing existing state resources to employ thousands of workers to construct new facilities, (7) the construction of a (a) campus focused on microtechnology, (b) microchip research laboratory, and (c) semiconductor manufacturing facility; (8) reducing disparity, creating new jobs; (9) furthering research, innovation, development, manufacturing of microchips; (10) rebalancing the economy through increasing its means to facilitate lasting prosperity.

Bibliography

AFT. (Accessed on October 11^th, 2024). Why Teacher Unions Are Good for Teachers—and the Public. https://www.aft.org/ae/winter2006-2007/ravitch

Archive. (Accessed on October 8^th, 2024). John Jay College Gets a True Campus After Nearly 50 Years. The New York Times. https://archive.nytimes.com/cityroom.blogs.nytimes.com/2011/11/02/with-600-million-building-john-jay-college-gains-a-whole-campus/

ASML. (Accessed on October 8^th, 2024). How Microchips are Made. ASML Description. https://www.asml.com/en/technology/all-about-microchips/how-microchips-are-made

ASML. (Accessed on October 8^th, 2024). The ASML Foundation Will Close. https://www.asml.com/en/company/asml-foundation

BLS. (Accessed on October 10^th, 2024). Consumer Price Index, New York-Newark-Jersey City. September 2024 : Northeast Information Office : U.S. Bureau of Labor Statistics. https://www.bls.gov/regions/northeast/news-release/consumerpriceindex_newyork.htm

BLS. (Accessed on October 10^th, 2024). Local Area Unemployment Statistics - New York City. Northeast Information Office. U.S. Bureau of Labor Statistics. https://www.bls.gov/regions/northeast/data/xg-tables/ro2xglausnyc.htm.

Bowman, A. et al. (2018). State and Local Government. Cengage Publishing.

Chips.gov. (Accessed on October 8^th, 2024). Home. https://applications.chips.gov/s/

Congress. (Accessed on October 8^th, 2024). H.R.4346 - 117th Congress (2021-2022): CHIPS and Science Act. Congress.gov. Library of Congress. https://www.congress.gov/bill/117th-congress/house-bill/4346

CUNY. (Accessed on October 9^th, 2024). Five Year Capital Request FY 2008-09 through FY 2012-13. https://www.cuny.edu/wp-content/uploads/sites/4/media-assets/FY08JohnJay.pdf

ESD.NY. (Accessed on October 8^th, 2024). Green CHIPS. Empire State Development. https://esd.ny.gov/green-chips

ESD.NY. (Accessed on October 8^th, 2024). Green CHIPS Community Plan Template. Empire State Development. https://esd.ny.gov/sites/default/files/Green-CHIPS-Community-Plan-Template_0.pdf

MRLCG. (Accessed on October 8^th, 2024). A Guide to Careers in the Semiconductor Industry. MRL Recruitment. https://www.mrlcg.com/resources/blog/a-guide-to-careers-in-the-semiconductor-industry/

NIST. (Accessed on October 8^th, 2024). National Institutes of Standards and Technology (NIST). https://www.nist.gov/system/files/documents/2024/04/19/Amended%20CHIPS-Commercial%20Fabrication%20Facilities%20NOFO%20Amendment.pdf

NYSUT. (Accessed on October 11^th, 2024). About NYSUT. https://www.nysut.org/about

Purdue. (Accessed on October 8^th, 2024). Online Master’s in Microelectronics and Semiconductors. https://discover.online.purdue.edu/programs/microelectronics-semiconductors.php?utm_source=google&utm_medium=search&utm_campaign=microelectronics&gad_source=1&gclid=EAIaIQobChMIxbOxz6D_iAMVnkRHAR2ZxQAREAAYBCAAEgJbw_D_BwE