For weeks, New York leaders have watched President Trump issue executive orders, slash federal funding and direct Elon Musk to shrink the government work force, while trying to determine how it all may affect the state.
Now some state lawmakers are trying to strike back.
Two Democratic legislators are introducing a bill on Wednesday aimed at Mr. Musk and the so-called Buffalo Billion project, in which the state spent $959 million to build and equip a plant that Mr. Musk’s company leases for $1 a year to operate a solar panel and auto component factory.
The bill would require an audit of the state subsidy deal to “identify waste, fraud and abuse committed by private parties to the contract.” It would determine whether the company, Tesla, was meeting job creation targets, making promised investments, paying enough rent and honoring job training commitments.
If Tesla was found to be not in compliance, the state could claw back state benefits, impose penalties or terminate contracts.
“It is the height of hypocrisy that Elon Musk, the man who is dismantling federal agencies and doing enormous damage on the basis of wildly unsubstantiated claims of waste, fraud and abuse, is the beneficiary of one of the biggest, shadiest subsidy deals of all time,” the two lawmakers, Senator Brad Hoylman-Sigal and Assemblyman Micah Lasher, said in a statement.
Tesla did not immediately respond to emails seeking comment.
The legislation is the latest example of how Democratic leaders in the State Capitol have looked for ways to show their constituents that they are standing up to Republicans like Mr. Musk and Mr. Trump.
Earlier this year, Gov. Kathy Hochul signed into law new protections for the state’s health care providers to help shield them from prosecution in states that ban abortion. Louisiana politicians are currently trying to extradite a New York doctor who was accused of prescribing and sending abortion pills to someone in the state.
Legislators have also introduced a bill that would let fired federal employees who are hired by the state buy pension credits in New York’s public retirements system.
Two other proposed bills would give Attorney General Letitia James, a Democrat, more power to pursue companies that enact “unfair and abusive business” or monopolistic practices. Former federal regulators say these bills are particularly important as President Trump and Mr. Musk “gravely weaken” federal oversight of corporations.
“We are trying to figure out what we can do as states to push back and reassert authority on behalf of working people,” said State Senator Michael Gianaris, the deputy majority leader.
“If you end up in a head-to-head battle with the federal government, you’re likely to lose,” he added. “But we can fill in the gaps that the federal government is now falling away on.”
Jessica Ramos, a state senator who is running for mayor in New York City, cited Senate Democrats’ decision in Washington to join with Republicans to prevent a government shutdown as an example of her party’s not doing enough to stand up to Mr. Trump.
She and Mr. Lasher introduced legislation that would let the state withhold funds meant for the federal government if “the federal government refuses to disburse funds to the state in contravention of a court order.”
“Democrats need to bring a gun to a gunfight,” she said. “The overwhelming feeling from constituents is, ‘We want to see Democrats have a spine. We want Democrats to fight back against the Republicans.’”
If there were any question of the underlying motivation behind the legislation being proposed by Mr. Lasher and Mr. Hoylman-Sigal, its title would put that to rest: the “New York Determining Obligations and Guaranteeing Enforcement (DOGE) in Government Contracting Act,” a somewhat strained reference to Mr. Musk’s so-called Department of Government Efficiency.
“The moment demands a new way of thinking about legislation,” said Mr. Lasher, who introduced several such bills. “You cannot look at what is going on and say that a normal set of responses is adequate, and you cannot talk to constituents and think they will expect business as usual.”
The bill could also prove embarrassing to former Gov. Andrew M. Cuomo, a Democrat who is trying to stage a political comeback in the New York City mayor’s race, by reminding voters of one of the biggest controversies during his decade in Albany.
In August 2015, when the solar panel manufacturing facility was completed, Mr. Cuomo, then the governor, marveled at the transformation of an abandoned brownfield into a high-tech plant sure to revive the ailing city. The factory was being operated by SolarCity, a Musk company later absorbed by Tesla.
Mr. Cuomo claimed the project would create 5,000 jobs statewide, and Mr. Musk had predicted that by 2020 the Buffalo plant would pump out enough solar panels to outfit 1,000 roofs a week. Those rosy projections never materialized.
The plant now produces chargers and related components for Tesla cars and trucks. According to a report by the consulting firm Wood Mackenzie, an average of 21 Tesla solar roofs were produced weekly in 2022.
Amendments to the agreement that relaxed deadlines and job targets have allowed Tesla to avoid tens of millions of dollars in penalties. The state is now offering to lower the job target from 3,460 to 3,000 statewide; officials say Tesla is currently at about 2,900 jobs, with over 2,000 of them in Buffalo.
Rich Azzopardi, a spokesman for Mr. Cuomo, said the old steel mill replaced by the factory “would have stayed like that forever” had the former governor not intervened, and that “now it’s a plant that has employed thousands of people for years.”
The state agency overseeing the deal, Empire State Development, said it has been negotiating higher rent payments and accountability measures with Tesla, but a formal lease renewal agreement has yet to be signed. The agency’s chief operating officer, Kevin Younis, said keeping good jobs in Buffalo remains the state’s top focus.
“We’re not doing this for Elon Musk,” he said. “Our goal is to get these jobs created in Buffalo and to get them to stay here as long as possible.”
Under the proposed agreement, Tesla would start paying $2 million a year in rent instead of $1, with the payments rising over time. The new deal also requires Tesla to spend at least $500 million building a “dojo” supercomputer at the site.
Rent payments were supposed to begin last year under the proposed deal, so if Tesla and New York State sign the agreement in the coming weeks as Mr. Younis anticipates, the state soon will receive a rent check of about $3 million covering all of 2024 and half of this year, he said.
“We expect to get paid this summer,” he said.
The two Democrats behind the bill say New York should not renew its agreement with Tesla if a review shows taxpayers got snookered in the original investment, which a conservative New York think tank characterized as “the single biggest economic development boondoggle” in U.S. history. A 2020 state audit found the project had returned 54 cents of economic benefit for every $1 in public money invested, a fraction of the benefit the state set as a benchmark — $30 per $1 spent — for such projects.
“There is an opportunity for an exit here and it may be in the interest of New York’s taxpayers for the state to take it,” the lawmakers said.