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New York’s Constitution’s “Gift & Loan Clause” Prohibits Public Spending To Benefit Private Businesses
ANALYSIS
Supervisor George Hoehmann is using taxpayer dollars to promote select private businesses in the Town of Clarkstown through paid advertisements on Facebook. Via his “Foodie Friday” campaigns, Hoehmann is also using town time and resources to film, produce, edit, and post advertisements for local businesses of his choosing.
Some of the private businesses town tax dollars are promoting include Noble Experiment Brewing Company, Norcina Pizza, The Coffee Maker, The No. 1 Chinese Kitchen, Mr. Bunker Moo, and Bailey’s Smokehouse. Each is the beneficiary of a two-plus minute video promotion produced by the town. Each also is the beneficiary of between $200 to $500 in paid ads on Facebook, according to a database Facebook makes publicly available on government ad spending.
None of the restaurants featured were celebrating grand openings. It is unclear how Supervisor Hoehmann chooses which businesses will benefit from taxpayer financed support.
New York law specifically prohibits the use of municipal resources, including tax dollars, for the benefit of private entities.
Use of municipal resources in New York State is governed by the New York State Constitution, specifically the “Gift and Loan Clause,” which regulates gifts or loans of public monies to private entities. The law states, in part, that “[n]o county, city, town, village or school district shall give or loan any money or property to or in aid of any individual, or private corporation or association, or private undertaking.”
This provision, prohibiting use of municipal resources for nongovernmental purposes, limits a municipality’s expenditures to ensure that the focus of municipal spending is the public good and that municipal resources are used only for government purposes, and not for the benefit of private enterprises.
The Gift and Loan Clause is intended to ensure that municipal resources are used only for public purposes. Anything else, like the use of public funds to pave private roads, would be an impermissible gift from the municipality to the private beneficiary. An exception exists where the expenditure is in furtherance of a public purpose and the municipality is contractually or statutorily required to spend the funds.
According to Facebook, the Town of Clarkstown has spent $45,997 on sponsored advertising between Sep 24, 2019 – Sep 23, 2026. The ad spending was designated by the Town as placed for “social issues, elections or politics.” Not all of the ad spending was used to promote private businesses.
In July, RCBJ wrote an article about an ethics complaint filed against Clarkstown by a Clarkstown resident for using paid Facebook advertising to promote incumbent political candidates. The complaint charged that at least 27 specific paid ads used taxpayer money to: (1) promote individual elected officials personally; (2) promote partisan state and federal politicians who have nothing to do with Town government; (3) advertise private businesses for their commercial benefit; and, (4) advocate political positions on pending state legislation. The spending on the ads ranged from under $100 to about $600 each.
It is unknown whether the Ethics Board is investigating the complaint.
Rockland Green
Rockland Green, a public benefit corporation whose legal mandate is limited to managing solid waste, recycling, environmental sustainability initiatives, and animal management, used public funds to sponsor Rockland Music Fest 2026, a for-profit venture. An inquiry to Rockland Green asking how much it spent on sponsorship went unanswered. Using public money to sponsor a for-profit entertainment event does not align with Rockland Green’s statutory purposes and may have been illegal.
The Gift and Loan Clause of the New York State Constitution, which prohibits public funding for private enterprise, applies to public benefit corporations like Rockland Green.
Rockland County
In 2025, Rockland Music Fest received a $10,000 grant from Rockland County as part of its tourism grants – a County program designed to promote Rockland County as a tourism destination – a program within the mandate of the County.
But, more recently, the County, through its Rock-Solid Campaign has been promoting individual businesses, including Rockland Digital Media, the Runcible Spoon, and 99 Signs through videos produced with County resoursces on its Facebook pages. While the posts are not sponsored (paid advertisements), they entail the use of county resources to promote individual private businesses, rather than promoting a general business climate or environment at large.
