Archive for the ‘Disclosure’ Category

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What’s NOT the Matter with Kansas and Arkansas?

February 17, 2012

Kansas and Arkansas are not big on subsidy transparency, but they are now represented for the first time in Good Jobs First’s Subsidy Tracker database. Using open records requests, we obtained data on nine corporate tax credit programs in Arkansas and two training programs in Kansas. This leaves only three states—Mississippi, Nevada and South Carolina—with no data in Subsidy Tracker. We are trying to obtain unpublished data from them as well.

The Kansas and Arkansas additions are part of the latest expansion of Subsidy Tracker: 20 new programs from a total of seven states. One of those states is Oregon, which recently began to post information on corporate tax credits pursuant to legislation enacted last year as the result of efforts by groups such as OSPIRG.

Subsidy Tracker now has more than 118,000 entries from 298 programs in 47 states and the District of Columbia. Below is a list of the latest programs added to the database.

Arizona: Arizona Competes Fund
Arkansas: Advantage Arkansas Income Tax Credits
Arkansas: ArkPlus Income Tax Credit
Arkansas: Create Rebate Program
Arkansas: Economic Investment Tax Credit
Arkansas: InvestArk Sales and Use Tax Credits
Arkansas: Sales and Use Tax Refund for Targeted Business
Arkansas: Targeted Business In-House Research Credits
Arkansas: Targeted Business Payroll Credits
Arkansas: TaxBack Sales and Use Tax Refunds
Kansas: Kansas Industrial Retraining
Kansas: Kansas Industrial Training
New Mexico: Film Investment Program
North Carolina: Industrial Development Fund
North Carolina: Job Maintenance and Capital Development Fund
North Carolina: Site Infrastructure Development Fund
Oregon: Employer Workforce Training Fund
Oregon: Greenlight Oregon Labor Rebate
Oregon: Oregon Investment Advantage Program
Rhode Island: Comprehensive Workforce Training Grants

Posted in Disclosure, Subsidies | 1 Comment »

NYC Unleashes Decades of Subsidy Data

February 1, 2012

After years of nudging by Good Jobs New York and others, subsidy transparency in the Big Apple took a giant leap forward yesterday.

Thanks to the New York City Council and a bill sponsored by Brooklyn’s Diana Reyna, the New York City Industrial Development Agency released data on 623 discretionary subsidy deals. The new report – which includes data as far back at the 1980’s – is trend-setting for being in excel (not just in PDF format) and for including all currently subsidized firms. Previous reports were only required to include project for a seven-year window. Previously, GJNY transcribed this data from PDF’s to create its “Database of Deals” and we will merge the two databases giving New Yorkers of all stripes: advocates, community organizers, elected and public officials, journalists and academics a unique tool that shines a light on how discretionary subsides are allocated.

As we explained in October of 2011 when the bill was passed, New York City is on an up- swing with regards to subsidy transparency. The report, formally known as the Annual Investment Projects Report, includes 126 fields of data including:

  • Current employment, promised employment and employment at time of deal
  • The amounts and types of city subsidies used to date and remaining
  •   Amount of subsidies recaptured
  • Percentage of employees that are city resident
  • Percentage of employees offered health benefits

Combining new subsidy deals, extensive company-specific data in a downloadable, excel format makes what we believe, to be the country’s best local subsidy disclosure report. Though, as reported last month, New York State still has plenty of room for improvement.

Good Jobs New York will be reviewing the data in the weeks ahead and will report back our findings. In the meantime, we encourage you to do the same!

Posted in Clawbacks, Disclosure, Jobs, New York, Property Taxes, Sales Tax, Subsidies | 1 Comment »

Subsidy Tracker Extends Its Reach

January 24, 2012

Subsidy Tracker, the Good Jobs First database of company-specific information on state and local economic development subsidies, has extended its geographic reach. Tracker now has some data from 45 states and the District of Columbia.

The latest states to be represented are Massachusetts, New Mexico and Wyoming, along with DC. We also added more data from Arizona, Maryland and Wisconsin. Tracker now contains information on more than 115,000 subsidy awards from 278 programs.

This new information was collected from a variety of sources. Maryland just posted a new online tool called Finance Tracker, which contains data on various tax credit, grant and loan programs from the past few years. With recipient address data (which assists in mapping) and download features, it is a big improvement on the PDF reports that used to be the state’s main form of disclosure. The tax credit listings, however, still lack amounts.

Wisconsin’s updated info comes from the less-than-elegant compilation of economic development awards posted by the state’s Commerce Department. The Arizona and Wyoming data come from PDF reports on single programs, while DC’s information is from its first Unified Economic Development Report (distributed in PDF form as well).

The Massachusetts and New Mexico data are unpublished. The info on the Massachusetts Economic Development Incentive Program was obtained through a public records request filed by MASSPIRG, which kindly agreed to share the results with us. The info on New Mexico’s Job Training Incentive Program was supplied directly by the state’s Economic Development Department.

The fact that a state is represented in Tracker does not mean that we have data on all of its subsidy programs. Our coverage of states varies greatly, depending on what has been posted online. Since we have captured everything of significance that is on the web, our focus now is on collecting more unpublished data – both from the five states not yet in Tracker (Arkansas, Kansas, Mississippi, Nevada and South Carolina) and on additional programs from the other 45 states.

Stay tuned as we continue our effort to drag every state subsidy program into the sunlight.

Posted in Disclosure, Subsidies | 2 Comments »

New Year Brings New Recovery Board Chair

January 4, 2012

By Andrew Seifter, Good Jobs First

President Obama has appointed Kathleen S. Tighe, Inspector General of the Department of Education, as the new chair of the Recovery Accountability and Transparency Board.  Tighe replaces Earl Devaney, who held the post since the Recovery Act was enacted in February 2009, but announced last month that he was retiring.

As an existing member of the Recovery Board (which consists of cabinet agency Inspectors General), Tighe has demonstrated a strong record of cracking down on fraud and misuse of government funds, so she is a logical, if conventional, choice to replace Devaney.  In a press release announcing her appointment, the Recovery Board highlighted several instances in which Tighe helped win settlements or convictions against fraudulent companies or individuals, including a former City University of New York employee who was convicted for trying to “scam more than $1.5 million in Re­covery Act grant funds.”  According to Tighe’s November 2011 Report to Congress, the case involved a former employee at the University’s Research Foundation who had presented two fraudulent Grant Award Notifications that were discovered by an official who had recently participated in a Recovery Act grant fraud awareness training provided by Tighe’s office.

Tighe also continues to serve as a member of the Government Accountability and Transparency (GAT) Board, suggesting that she will remain a critical player in ongoing efforts to transfer the accountability measures of the Recovery Act to all federal spending.  The GAT Board has been active of late, issuing three key recommendations to the President in December.

As I surmised from reading Devaney’s resignation letter and his final Recovery.gov “Chairman’s Corner” column, one of the GAT Board recommendations is for a uniform ID system for all federal spending projects.  The Board wisely suggests that in pursuing this goal the government incorporate standardization efforts already underway at the Federal Acquisition Regulatory Council and the Treasury Department.  The other recommendations are somewhat broader: adopt a “cohesive, centralized accountability framework” to track spending, and reevaluate the methods the government employs to collect and display data.

The GAT Board mentioned one benefit of data standardization, in particular, that got our attention at Good Jobs First: it would “foster a common understanding of data between the Federal Government and the states, which are the largest recipients of Federal funds.”  We’d consider that a huge step forward for spending transparency, based on our experience tracking the Recovery Act.  Although the Stimulus has pushed the states toward improved disclosure, all too often certain information about both spending and outcomes (such as job impact) has been lost in translation as money moved from the federal government to state agencies that then passed it on to local recipients.

We also strongly support the GAT Board in urging the government to “stay on the cutting edge” by constantly exploring ways to make use of advances in technology such as geospatial services.  We’ve seen for ourselves that the possibilities in this regard are far greater than they were years, even months ago.  As the state of technology continues to improve, the bar for transparency must continue to rise.

Many of the GAT Board’s observations and recommendations are a direct result of the Recovery Act, and not just because it provided a powerful model for tracking billions of dollars of government funds.  The Recovery Act also moved the conversation forward by highlighting the limitations of the current system.

For example, the Recovery Act has pressed federal agencies to improve their internal reporting procedures and address problems with existing protocols.  As Recovery Board member and Department of Commerce IG Todd J. Zinser said in November 30 testimony to the House Science, Space and Technology Subcommittee on Oversight and Investigations, the Commerce Department met Recovery Act reporting requirements, but only by “performing many manual procedures to compensate for grant and contract system inadequacies.”  Zinser’s remarks bring to mind Recovery.gov Director Mike Wood’s comment last spring that a Deputy Secretary at the Department of Housing and Urban Development told him that HUD “changed their whole management structure … based on how they ran their Recovery program.”

Posted in Disclosure, Economic Recovery, Federal Job Subsidies, Recovery Act | Leave a Comment »

Leaving a Lasting Legacy, Devaney Can Depart Recovery Board with Head Held High

December 14, 2011

By Andrew Seifter, Good Jobs First

Earl Devaney, who as Chairman of the Recovery Accountability and Transparency Board oversaw implementation of the Recovery Act’s revolutionary accountability measures, is retiring.

A longtime civil servant with a breadth of experience in law enforcement, Devaney proved during his tenure on the Recovery Board that enhanced transparency not only keeps the public informed of the costs and benefits of government spending projects; it also prevents waste and fraud.

While law enforcement officials still aggressively use the full weight of the law to go after instances of fraud, the bright light that the Recovery Act has shined on the flow of funds has made scammers think twice before trying to cheat Uncle Sam.  As Devaney recently told the Washington Post, “I think this [Recovery Act] money was so transparent that guys that really commit big frauds … didn’t come near this money.”  Recovery.gov director Michael Wood has similarly credited transparency for the Recovery Act’s “very low non-compliance rate” and “extremely low” fraud rate.

Devaney’s work is also a testament to the bipartisan nature of support for spending transparency and accountability.  Even on an issue as politically polarizing as the Recovery Act, Devaney’s efforts to police stimulus funds are respected on both sides of the aisle.  How many other officials in Washington, upon announcing their retirement, could draw effusive praise from both Vice President Biden and Republican Congressman Darrell Issa?

In addition to leaving the Recovery Board, Devaney is also resigning as Chairman of the Government Accountability and Transparency Board (GATB), the institution President Obama created this year and tasked with expanding the Recovery Act’s transparency measures to all federal spending.  In his resignation letter, Devaney hinted that the GATB is “on the verge of proposing concrete methods to increase accountability and transparency of all Federal funds.”

On November 21, Devaney devoted his final Recovery.gov “Chairman’s Corner” column to making the case for a “uniform government-wide award identification number” for federal spending. This administrative restructuring, he argued, is essential for full spending transparency and will save the government both time and money.  We’ll see if this recommendation is part of the forthcoming GATB proposal that he referenced.

No doubt a very busy man, there is one other position that Devaney is stepping down from before riding off into the sunset: Inspector General of the Interior Department.  Among his many accomplishments while serving in that post, which he’s held since 1999, Devaney oversaw investigations that led to the well-publicized conviction of lobbyist Jack Abramoff.

Posted in Disclosure, Economic Recovery, Recovery Act | Leave a Comment »

Most Texas Enterprise Fund Job Grantees Failed to Deliver in 2010

November 9, 2011

Source: Texans for Public Justice, 2011.

A new Texans for Public Justice report (available here) finds that most of Governor Rick Perry’s Texas Enterprise Fund (TEF) projects failed to deliver on their 2010 job promises. The study analyzes compliance reports filed by 65 companies that received $350 million to create Texas jobs in 2010.

“Governor Perry’s jobs’ stimulus program is a classic example of government waste, fraud and abuse,” said Texans for Public Justice Director Craig McDonald. “The Enterprise Fund has an alarming rate of defaulting on the Governor’s jobs promises.”

A summary that Governor Perry’s office published in August suggests that $440 million in taxpayer TEF grants have created 59,600 Texas jobs. Perry claimed in an October presidential debate that TEF has produced 54,600 jobs. Putting aside five TEF projects that TPJ asserts are fraudulent job claims and a sixth project that appears to be undergoing an audit, TPJ found evidence that TEF had created 22,349 jobs by the end of 2010. That number amounts to 37 percent of the job claims made by the Governor’s Office.

Analyzing the 65 TEF projects, the new report found that:

  • 24 projects (37 percent) failed to deliver on their original 2010 job promises;
  • 17 projects (26 percent) complied with their 2010 job commitments;
  • 11 failing projects were terminated prematurely (17 percent);
  • 7 projects are troubled (11 percent), usually because they defaulted on 2010 job pledges but covered the shortfall with job credits earned by exceeding their job targets in past years;
  • 5  projects (8 percent) were found by TPJ to fraudulently claim that they created more jobs than they actually did (this category includes most of TEF’s largest grants); and
  • One project claimed “new” jobs that had hiring dates predating its TEF contract.

Posted in Disclosure, Jobs, Subsidies | Leave a Comment »

Large, Profitable Corporations Get Huge Federal Tax Breaks

November 4, 2011

The most consistently profitable companies in the Fortune 500 only pay about half the statutory federal income tax rate—a fourth pay less than 10 percent. Some even get refunds from Uncle Sam—30 companies have enjoyed a negative income tax rate the past three years despite making $160 billion in pre-tax profits.

It’s the definitive study that punctures calls for a cut in the federal income tax rate on corporations, provided yesterday by Citizens for Tax Justice and the Institute on Taxation and Economic Policy (CTJ and ITEP) in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010.”

Looking at shareholder filings for those Fortune 500 companies that reported profits in each of the three years, CTJ and ITEP found that 280 companies paid an average effective rate of just 18.5 percent and for the last two years only 17.3 percent, less than half the statutory rate of 35 percent.

The study catalogs the underlying causes, many of which have eroded progress in the federal tax code made in the 1986 reform act that plugged many loopholes: accelerated depreciation, stock options, industry-specific tax credits, and offshore tax sheltering.

Bottom line, it’s why federal corporate income taxes have plummeted as a share of GDP from almost 4 percent in the 1960s to just over 1 percent today. And a key reason, CTJ director Bob McIntyre argues, why any corporate tax reform should not be “revenue neutral” but should instead plug loopholes and restore balance.

For those of us who follow companies that aggressively seek state and local economic development subsidies, including avid users of Subsidy Tracker, there are familiar names among the low-tax rate/high-tax break crowd, like Boeing, Walmart, and Goldman Sachs.

Indeed, CTJ and ITEP will soon release a follow-on study looking at state taxes paid by the Fortune 500. Although publicly traded companies only report such taxes in one aggregate 50-state number, the finding will show how tax exemptions and credits cut the actual tax rate companies pay (along with loopholes like Passive Investment Companies and failed giveaways like Single Sales Factor).

For a primer on how companies dodge state income taxes, see chapter 4 of The Great American Jobs Scam, and for a summary of how corporate tax dodging has shifted the burden for public services onto working families, see chapter 8.

Finally, the study also punctures the argument that the U.S. has to lower its corporate tax rates because of lower rates offshore. Of those companies among the 280 with significant foreign profits, they paid foreign tax rates almost a third higher than their domestic rates. It argues that “closing the loopholes will have real benefits, including a fairer tax system, reduced federal budget deficits, and more resources to pay for improving our roads, bridges and schools — things that really are important for economic development here in the United States.”

Amen.

Posted in Disclosure, Federal Job Subsidies, Single Sales Factor, Subsidies, Taxes | Leave a Comment »

Connecticut Economic Development Subsidies Are Costly and Poorly Monitored

October 24, 2011

Connecticut’s major economic development expenditures are high in cost, poorly monitored and may be undermining the public goods that actually constitute the state’s competitive advantage for jobs.  These are the findings of a new Good Jobs First report released today.

The report entitled, Connecticut Economic Development Subsidies: Costly and Blunt, found that corporate income tax credits can have high cost-per-jobs figures (one cost taxpayers $169,667 per job) and that some companies getting subsidies don’t meet job creation promises. The report recommends that the state’s existing programs be thoroughly evaluated and that the state adopt better online transparency of costs and benefits before considering new spending.

Among the findings, we found:

  • Two-thirds of the state’s economic development dollars ($173 million in FY 2011) are spent outside the purview of the Department of Economic and Community Development (DECD) which, although it needs improvement, has more rigorous oversight standards than the other controlling agencies.
  • Some of the most expensive subsidies (such as research and development tax credits, the electronic data processing equipment property credit, and the fixed capital investment tax credit) are structured as uncapped, as-of-right subsidies and their eligibility requirements prevent the state from attaining the biggest bang for the buck.
  • Even for those programs that do officially have clawbacks, their application is unknown. An analysis of DECD’s 2010 annual report reveals that 31 business assistance contracts (out of the 70 contracts total) which underwent a DECD audit failed to meet their job creation targets. Combined, these companies were awarded nearly $86 million in subsidies. Unfortunately, DECD has not disclosed whether these companies, all failing state job audits, repaid subsidies. Taxpayers have a right to know whether a clawback occurred, and if so, how much money was recaptured.
  • Tax credits can have high cost-per-job figures and result in job losses. One subsidy cost taxpayers $169,667 per job created. The top ten most expensive subsidy packages cost taxpayers an average of $98,672 per job. Worse, in 2005 Connecticut’s Finance, Revenue and Bonding Committee commissioned a study which found that 14 out of the 24 studied tax credit programs led to net job losses.  For instance, the fixed capital investment credit created a net loss of 226 jobs.
  • DECD does not disclose the wages and benefits paid by each company utilizing subsidies. Annual reports, however, show that some companies received subsidies for promising to create low-wage jobs causing hidden taxpayer costs for employees which must rely on the public safety net system.
  • Most job creation promises made by companies receiving subsidies are not creating new jobs in Connecticut. Eighty percent of the job promises relate to retaining jobs from existing Connecticut businesses threatening to leave the state or shut down. Studies on job creation tax credits show that 70% or more of the credits awarded to recipients paid companies for jobs that would have been created anyways.
  • Many “new” Connecticut jobs are actually relocating a short distance from adjoining states. For instance, Starwood Hotels received $75 million to move less than 20 miles down the road into Connecticut from Harrison, New York. Some affected workers simply commute from out-of-state and therefore don’t pay Connecticut state income taxes, local property taxes, or state and local sales taxes. Shifting jobs in the same metropolitan area doesn’t grow regional economies.

Posted in Clawbacks, Corporate relocations, Disclosure, Hidden Taxpayer Costs, Subsidies | Leave a Comment »

U.S. PIRG Takes on TIF

October 14, 2011

Tax-increment financing is the most insidious type of economic development subsidy. Whereas it’s clear in programs such as property tax abatements that public revenues are being given away, proponents of TIF have often persuaded public officials that it provides something for nothing. That’s wishful thinking, of course—TIF-subsidized projects increase the demand for public services but don’t contribute to the revenues needed to pay for them—but too many officials have succumbed to the illusion. TIF is now used (often overused)  in every state but Arizona.

The good news is that concern about TIFs is spreading from specialized policy organizations to activist groups. The latest sign of this is the report on TIF just published by the U.S. PIRG Education Fund.

In addition to explaining to the uninitiated how TIFs work, the report provides a detailed critique of their pitfalls. These include a tendency to encourage development in areas that are not blighted; enrichment of well-connected developers; and a dangerous diversion of revenues away from vital public services.

The U.S. PIRG report also does a good job in cataloguing the accountability shortcomings of TIFs, including the failure by many jurisdictions to disclose which parties are benefiting from TIF deals or even summary data about the costs of the program. Also included is an appendix providing details on each state’s TIF practices, including whether there are requirements for the creation of a TIF district or the approval of a TIF deal.

Posted in Disclosure, Tax Increment Financing | 1 Comment »

Subsidy Tracker Completes Online Data Capture

September 20, 2011

Subsidy Tracker, the Good Jobs First database of company-specific information on economic development subsidies, has reached a new milestone: We have finished capturing all available online data from state programs around the country. The database now contains more than 112,000 entries from 246 programs in 41 states. A complete list of sources is here.

Our latest batch of new data covers 16 additional programs in six states. One of those states is South Dakota, which recently began publishing subsidy recipient data for all of its largest programs. Alabama appears in Tracker for the first time with data on its Industrial Development Training program. We also expanded the number of years covered for 53 programs in 15 states. See below for a full list of recent changes.

Now that we have completed assembling data from a vast array of online sources, we will focus our attention on getting more unpublished data from state agencies, especially those states that don’t have any online recipient disclosure. Subsidy Tracker already contains unpublished data from 14 programs in 11 states. We will also begin to look at selected local subsidy programs.

We have made improvements to the search engine, including a new feature that displays state-specific dropdown menus for categories such as program name, city and county. This allows for more focused searches.

New programs added

Alabama
Alabama Industrial Development Training

Minnesota
Non-JOBZ Local Subsidies

Ohio
Business Development Grants
Economic Development Contingency Grant
Energy Sector Training Grants
Facilities Establishment Fund
Logistics & Distribution Stimulus Program
Minority Business Enterprise Loan
Research & Development Loan Fund

South Dakota
Agricultural Processing and Export Loan Program (APEX)
Dakota Seeds
Pooled Bond Program
Workforce Development Program

Virginia
Special Performance Grants

Wisconsin
Film Production Services Credit
Jobs Tax Credit


Additional years added

Arizona
Motion Picture Production Tax Incentive Program

Illinois
Business Development Public Infrastructure Program
EDGE Tax Credit
Employee Training Investment Program
Enterprise Zone Expanded M&E Sales Tax Exemption
Enterprise Zone State Utility Tax Exemption
High Impact Business Designation
IDOT Economic Development Program
Large Business Development Assistance Program

Indiana
Twenty-First Century Research and Technology Fund

Maine
Employment Tax Increment Financing

Minnesota
Job Opportunity Building Zones (JOBZ)

Nebraska
Invest Nebraska Act
Nebraska Advantage Act
Nebraska Advantage Rural Development Act

Ohio
Industrial Training Grant
Innovation Ohio
Investment in Training Expansion
Job Creation Tax Credit
Job Retention Tax Credit
Third Frontier
Thomas Edison Program
Workforce Development Initiatives

Oklahoma
Investment/New Jobs Tax Credit

Oregon
Business Energy Tax Credit (BETC)

Pennsylvania
Research & Development Tax Credit

Rhode Island
Distressed Areas Economic Revitalization Act-Enterprise Zones
Incentives for Innovation and Growth
Jobs Development Act/Corporate Income Tax Reductions
Motion Picture Production Tax Credit
Project sales tax exemptions

Utah
Economic Development Tax Increment Financing
Industrial Assistance Fund

Virginia
Governor’s Opportunity Fund
Virginia Investment Partnership and Major Eligible Employer Grant

West Virginia
Governor’s Guaranteed Work Force Program

Wisconsin
Blight Elimination and Brownfield Redevelopment Program
Business Employees Skills Training
Buy Local, Buy Wisconsin Grants
Community Development Zone
Customized Labor Training Fund
Dairy Manufacturing Facility Investment Credit
Development Opportunity Zone
Economic Development Tax Credit Program
Enterprise Development Zone
Film Production Company Investment Credit
Industrial Revenue Bonds
Major Economic Development
Technology Assistance Grant
Technology Matching Grant
Technology Venture Fund Loan
Technology Zone
Transportation Economic Assistance

Posted in Disclosure, Subsidies | Leave a Comment »

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