Last week brought three major investigative articles about the American Legislative Exchange Council (ALEC), the corporate-backed network of state legislators, and its ties to the State Policy Network (SPN), a group of conservative think tanks often associated with proposals to suppress wages, cut social safety net spending, and make tax systems more regressive (among many other things).
The articles—based on leaked internal ALEC documents— were published by The Guardian, the U.K.-based newspaper that also broke many of Edward Snowden’s NSA revelations. Find the articles themselves here and here and here.
Readers may remember that ALEC gained harsh attention in the wake of the Trayvon Martin killing because of its advocacy for “stand your ground” laws like the one that shielded Martin’s killer. The Guardian articles indicate that the ALECexposed.org revelations from the Center for Media & Democracy and related exposés from Common Cause, Color of Change and others have taken a toll on ALEC, costing it more than 40 corporate members and almost 400 state legislator members.
But specifically regarding the State Policy Network, the Guardian’s most important revelation is a summarized list of funding proposals from SPN groups to the Searle Freedom Trust, a conservative foundation. The proposals were to be reviewed and ranked by Stephen Moore, a conservative activist who wears multiple hats, including Wall Street Journal editorial board member.
Only brief summaries of the proposals were disclosed (one can only hope The Guardian has more to reveal). Published in cooperation with the Portland [Maine] Press Herald and the Texas Observer, they are remarkable, outlining work to eliminate state income taxes, reduce public employee pensions, oppose Medicaid expansion, create a single tax-free county (no income taxes but right to work), privatize a state department of transportation, criticize the streamlined sales tax, encourage workers to leave their union, and promote new super-majority requirements to raise local taxes.
On economic development subsidies specifically, consider these tantalizing nuggets from the leaked documents:
The Advance Arkansas Institute sought “$35,000 to conduct a campaign for the elimination of tax subsidies and the lowering of income tax rates on citizens of Alabama.”[sic]
The Kansas Policy Institute sought “$46,800 to conduct a campaign calling for deregulation as an alternative to economic development incentives.” Its work plan included a “research report detailing the inefficacy of economic development incentives…”
The Mackinac Center for Public Policy (Michigan) sought “$35,000 to research and report on the inefficacy [of] state-funded tourism incentives.”
The John Locke Foundation (North Carolina) sought “$50,000 to discredit the use of the IMPLAN model in regional economic impact analyses,” including publication of a primer and six staged events. This request struck us as odd: IMPLAN is a widely used, mainstream input-output modeling software product (like its commercial rival REMI or the federal Bureau of Economic Analysis tool, RIMS-II). IMPLAN is 37 years old and moved from Wisconsin to North Carolina earlier this year—with no subsidies.
As Good Jobs First regularly points out, economic development subsidy abuse is not a partisan issue and many reform episodes have been bi-partisan. Transparency is the most common left-right common ground, but differences often emerge when it comes to alternatives: if a program is eliminated or curtailed, is it better to spend the resulting savings on corporate tax cuts and deregulation or on skills and infrastructure?
Also of note: The Beacon Hill Institute shows up at least three times in the leaked SPN proposals. BHI describes itself as “the research arm of the Department of Economics at Suffolk University in Boston,” and it is listed as an associate member of SPN. In the SPN proposal summaries, BHI is listed as requesting $38,825 to study the eight-state Regional Greenhouse Gas Initiative. “Earned media and legislative efforts to repeal or diminish the RGGI will be determinants of success.”
The summary also shows BHI as having received grants in both 2010 and 2011 from the Searle Freedom Trust: an uncompleted project on “Pension Reform” and another including “a large time series database that contains valuable detailed characteristics of public employees—data BHI is now sharing with researchers at other SPN organizations.” BHI also shows up in the John Locke Foundation proposal in North Carolina, which said it “will partner with the Beacon Hill Institute” in the aforementioned review of IMPLAN. Finally, the Empire Center for New York State Policy’s proposal summary says it will issue a study on the state’s estate tax in conjunction with BHI.
(Clawback readers may recall that BHI is one of those groups issuing rankings of state “business climates” that we criticized in our Grading Places study last May.)
The BHI proposal that would be considered successful if it helped repeal or diminish the Regional Greenhouse Gas Initiative was apparently news to Suffolk University: when the Guardian inquired, the University “sharply criticised the research proposal to the Searle Foundation” and said in a statement that it would never have approved the BHI proposal if it had been submitted for prior review.
For more context, see the Center for Media and Democracy’s reports on “Extreme Pressure Groups Masquerading as Think Tanks.”