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Giant Job Subsidy Packages Grow More Common and Costly

June 19, 2013

moneybagsWashington, DC, June 19, 2013 — In recent years, state and local governments have been awarding giant economic development subsidy packages to corporations more frequently than ever before. The packages frequently reach nine and even ten figures, and the cost per job averages $456,000 and often exceeds $1 million.

These are the findings of Megadeals, a report released today by Good Jobs First, a non-profit resource center based in Washington, DC.

“These subsidy awards are getting out of control,” said Philip Mattera, research director of Good Jobs First and principal author of the report. “Huge packages that used to be reserved for ‘trophy’ projects creating large numbers of jobs are now being given away more routinely.”

In a painstaking review using hundreds of sources, Good Jobs First identifies 240 “megadeals,” or subsidy awards with a total state and local cost of $75 million or more each. The cumulative cost of these deals is more than $64 billion.

The number of such deals and their costs are rising: since 2008, the average frequency of megadeals per year has doubled (compared to the previous decade) and their aggregate annual cost has roughly doubled as well, averaging around $5 billion. For those deals where job projections were available, the average cost per job is $456,000.

Michigan has the most megadeals, with 29, followed by New York with 23; Ohio and Texas with a dozen each; Louisiana and Tennessee with 11 each; and Alabama, Kentucky and New Jersey with 10 each. Forty states plus the District of Columbia have done at least one megadeal.

In dollar terms, New York is spending the most, with megadeals totaling $11.4 billion. Next is Michigan with $7.1 billion, followed by five states in the $3 billion range: Oregon, New Mexico, Washington, Louisiana, and Texas.

“Despite their high costs, some of the deals involve little if any new-job creation,” said Good Jobs First executive director Greg LeRoy. “Some are instances of job blackmail, in which a company threatens to move and gets paid to stay put. Others involve interstate job piracy, in which a company gets subsidies to move existing jobs across a state border, sometimes within the same metropolitan area.”

Megadeals have been awarded to many of the largest and best known companies based in the United States as well as foreign ones doing business here, including: every large domestic automaker and all of the foreign auto producers with appreciable U.S. sales; oil giants such as Exxon Mobil and Royal Dutch Shell; aerospace leaders Boeing and Airbus; banks such as Citigroup and Goldman Sachs; media companies such as Walt Disney and its subsidiary ESPN; retailers such as Sears and Cabela’s; old-line industrials such as General Electric and Dow Chemical; and tech leaders such as Amazon.com, Apple, Intel and Samsung.

The most expensive single listing is a 30-year discounted-electricity deal worth an estimated $5.6 billion given to aluminum producer Alcoa by the New York Power Authority. Taking all of a company’s megadeals into account, Alcoa is at the top with its single $5.6 billion deal, followed by Boeing (four deals worth a total of $4.4 billion), Intel (six deals worth $3.6 billion), General Motors (11 deals worth $2.7 billion), Ford Motor (9 deals worth $2.1 billion), Nike (1 deal worth $2 billion) and Nissan (four deals worth $1.8 billion).

Fifty-six megadeals went to corporations with parents based outside the United States and seven more went to joint ventures of domestic and foreign companies.

The megadeals list is a new enhancement of Good Jobs First’s Subsidy Tracker database, the first online compilation of company-specific data on economic development deals from around the country.

Until now, the content of Subsidy Tracker has consisted exclusively of official disclosure data provided by state and local governments. However, many large deals pre-dated disclosure and many recent ones are missing from the official lists because of gaps in state and local transparency practices. To overcome those constraints, Good Jobs First went back and assembled information on large deals using a wider variety of sources. The resulting list of megadeals has been incorporated into Subsidy Tracker.

In a policy sidebar, the study points out that the Governmental Accounting Standards Board (GASB) has been long-negligent in failing to promulgate regulations for how state and local governments should account for tax-based economic development expenditures.  If GASB were to finally promulgate such regulations—covering both programs and deals—taxpayers would have standardized, comparable statistics about megadeals and could better weigh their costs and benefits.

Subsidizing Union Avoidance at Wal-Mart and Nissan

June 7, 2013

walmart-strike-300x168Most Americans have been made to believe that they have no stake in private sector labor issues. Unions, we are told, are irrelevant to the working life of the vast majority of the population, whose economic fate is supposedly being determined solely by their employers or by individual skills in maneuvering through the labor market.

This narrative, however, is being challenged by organizing campaigns that are taking on two giant corporations – Wal-Mart and Nissan – and showing that collective action is not defunct. And two reports related to the campaigns show that not only the workers involved, but also taxpayers in general, have a stake in their outcome.

For the past 30 years, Wal-Mart has fought bitterly against the efforts of its employees to organize for better pay and benefits. It showed no hesitation in firing workers who supported union drives and routinely closed down operations where successful representation elections were held.

A new wave of non-traditional organizing by Making Change at Walmart and OUR Walmart has revived the prospects for change at the giant retailer. Strikes have become a frequent occurrence at Wal-Mart stores in recent weeks, and large numbers of Wal-Mart workers and their supporters have been converging on Bentonville, Arkansas to make their voices heard at the company’s annual meeting.

A recent report by the Democratic staff of the U.S. House Committee on Education and the Workforce is a reminder that taxpayers are put in a position of subsidizing the low wages and poor benefits that the Wal-Mart campaigners are protesting. The study, which updates a 2004 report by the committee, reviews the hidden taxpayer costs stemming from the fact that many Wal-Mart workers have no choice but to use social safety net programs—such as Medicaid, Section 8 Housing, food stamps and the Earned Income Tax Credit—that were designed for individuals not in the labor force or those working for small companies that failed to provide decent compensation, not a leviathan with $17 billion in annual profits.

The Democratic staff report estimates that today the workers in a typical Wal-Mart Supercenter (Wisconsin is used as the example) make use of programs that cost taxpayers at least $904,542 a year and possibly as much as $1.7 million. Since Wal-Mart has more than 3,000 Supercenters in the U.S., plus hundreds of other types of stores, those costs run into the billions.

Nissan has been following in Wal-Mart’s footsteps in Mississippi, where it opened a large assembly plant a decade ago. The plant brought several thousand direct jobs to the state, but the problem is that many of the jobs are substandard. The company makes extensive use of temps, who are currently paid only about $12 an hour.

In response to the use of temps as well as issues concerning the conditions faced by regular employees, Nissan workers have been organizing themselves with the help of the United Auto Workers. Rather than accepting labor representation, as it does in numerous other countries, Nissan is seeking to intimidate workers using the usual toolbox of union avoidance techniques such as threats and bombarding workers with anti-union propaganda.  The workers, however, have been bolstered by strong community support from groups such as the Mississippi Alliance for Fairness at Nissan.

My colleagues and I at Good Jobs First recently issued a report commissioned by the UAW documenting the extent to which Nissan has enjoyed lavish tax breaks and other financial assistance from state and local government agencies. We found that the subsidies, which were originally estimated at around $300 million when the company first came to the state in 2000, have mushroomed to the point that they could be worth some $1.3 billion. That works out to some $290,000 per job. Noting the over-dependence on temps, we state that Mississippi taxpayers are paying “premium amounts for jobs that in many cases are far from premium.”

Although it was outside the scope of our report, it is clear that the Nissan temps, like the Wal-Mart workers, are also generating hidden taxpayer costs through their use of safety net programs. And we have previously documented that Wal-Mart frequently gets the kind of economic development subsidies Nissan is enjoying in Mississippi.

Whether through hidden taxpayer costs or job subsidies, the public is frequently put in the position of aiding companies like Wal-Mart and Nissan that disregard labor rights while failing to pay their fair share of the cost of government. Perhaps the interests of taxpayers and workers are not so different after all.

Reposted from the Dirt Diggers Digest

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Examining Local Subsidy Transparency

May 30, 2013

Study: Big Cities and Counties Fail to Disclose Costly Job Subsidies

Washington, DC, May 30, 2013 — Two-thirds of the economic development subsidy programs run by the nation’s largest cities and counties do not use the web to report which companies are receiving the tax breaks and other forms of financial assistance. Among the third of programs that do practice online transparency, most do so poorly, failing to disclose the dollar value of the subsidies. An even smaller number reveal key outcomes such as how many jobs were created.

These are the central findings of a report released today by Good Jobs First, a Washington, DC-based non-profit research center on economic development accountability. The report, Show Us the Local Subsidies, is available on the Good Jobs First website at http://www.goodjobsfirst.org/localsubsidies.

“While a handful of cities enable taxpayers to see the costs and benefits of every deal, we were disappointed by the poor state of transparency in most major localities,” said Leigh McIlvaine, a research analyst at Good Jobs First and principal author of the report. “Taxpayers in those cities and counties deserve better.”

The report is part of an ongoing effort by Good Jobs First to track and promote online transparency of economic development subsidies awarded to businesses for job creation and/or retention. It is a companion to our 2010 study Show Us the Subsidies, which graded online disclosure practices by state programs. (Local governments account for about half of the $70 billion spent annually by states and cities for economic development.)

“Most major localities are far behind state governments when it comes to job-subsidy transparency,” said Good Jobs First executive director Greg LeRoy. “We hope that our new report will inspire them to improve their disclosure practices.”

Show Us the Local Subsidies looks at transparency in the country’s 25 most populous cities and 25 most populous counties. Thirty-six of those localities have locally-controlled economic development subsidy programs. One or two major programs in each were graded for a total universe of 64. Key findings:

  • Among those 64 programs, only 21 (located in 16 jurisdictions) report recipient company names online.
  • Even among those programs that do disclose, costs and benefits are mostly still missing. Only 10 of the 21 programs report the dollar value of the subsidies initially awarded, and only 6 report actual disbursements. Only 4 programs report jobs actually created, and only 9 report other outcomes such as wages.
  • The best disclosure practices are in: Memphis/Shelby County, Tennessee; New York City; Austin, Texas; and Chicago. These jurisdictions stand out for company-specific data with costs, benefits and more.
  • Among the 20 large localities still failing to disclose are Broward County (Florida), Charlotte, Cook County (Illinois), Dallas, Harris County (Texas), Los Angeles (both city and county), Miami-Dade County (Florida), Philadelphia, and San Francisco.

Good Jobs First evaluated the 21 programs with disclosure on a scale of 0 to 100 based on their inclusion of: basic recipient information; subsidy commitments; subsidy outcomes ; and user-friendliness and accessibility. Three “bonus” categories worth up to 15 additional points include: the span of disclosure years; reporting of outcomes in addition to job creation; and the use of maps to demonstrate the location of subsidized projects.

“Taxpayers have a right to know where their investments in job creation went and whether they are paying off,” McIlvaine said. “Clearly, localities can disclose such basic information, and do so in a comprehensive, intuitive, and accessible manner by embracing the best practices we document here.”

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Bosses for Buses

May 29, 2013

For Release Wednesday, May 29, 2013
Contact: Greg LeRoy 202-232-1616 x 211

“Bosses for Buses”
Study: Employer Support for Transit is Surging Locally but Fractured Nationally

Washington, DC—American employers are organizing and winning better public transportation in many metro areas. Major employers such as universities and hospitals and coalitions of businesses help explain why state and local ballot initiatives for transit consistently win more than 70 percent of the time.

Yet at the national level, there is not a unified corporate voice for transit; this has been especially evident during three recent federal debates that affected this vital public service. Instead, there are disparate voices speaking only to selected aspects of transit.

Local business coalitions—united by geography—are mostly powered by companies that depend on transit, whereas national advocacy is dominated by companies that make a business selling to transit agencies. As well, there are competing priorities within public transportation circles, such capital budgets versus operating funds.

Those are the key conclusions in a major study released today by Good Jobs First cataloging the many kinds of businesses that support public transit and the diverse ways they express that support. “Bosses for Buses” is believed to be the most wide-ranging study ever published on the subject; it was released at a national tele-press conference and is available at http://www.goodjobsfirst.org/bossesforbuses.

“The remarkable local support for transit demonstrated by so many employers is truly heartening,” said Greg LeRoy, executive director of Good Jobs First and lead author of the study. “But the lack of a unified corporate voice on federal transit issues is equally disheartening. It begs the big-picture question: when will the growing corporate consensus for transit outside the Beltway translate into stronger action inside the Beltway?”

The study finds most promising the formation and growth of business-led groups in specific metropolitan areas,  as well as some outstanding individual large employers—often “eds and meds,” or universities and hospitals. And every day, tens of thousands of employers subsidize transit use—or facilitate the use of pre-tax income for monthly transit fare cards or commuter van pools.

At the national level, many businesses that sell goods and services to transit agencies belong to the American Public Transportation Association (APTA), the voice of big-city transit agencies. The study also describes how employers participate within the Community Transportation Association of America, the Association for Commuter Transportation, and Best Workplaces for Commuters.

Aspects of the 2009 federal stimulus, the belated 2012 reauthorization of the surface transportation act, and the big January 2013 federal income tax compromise all bore upon transit, yet none drew a unified corporate voice for transit service. Nor has there been corporate support for federal aid to shield transit operations from the catastrophic national wave of service cuts, fare hikes and route abandonments seen since 2008.

The study profiles outstanding networks and companies:

  • Washington University in St. Louis, which has anchored Citizens for Modern Transportation, a winning coalition, and has long promoted and subsidized transit use by its workforce and student body;
  • Cleveland Clinic and University Hospitals of Cleveland, the city’s two largest employers, which led the successful campaign for the HealthLine, one of the nation’s most successful Bus Rapid Transit (BRT) lines;
  • Friends of Transit in the Phoenix metropolitan area, a winning spinoff of the Greater Phoenix Chamber of Commerce, with its “Transit Means Business” campaign grooming the next generation of business leaders for transit;
  • The Baton Rouge General Medical Center, which joined with other employers and a faith-based community group to win a 2012 ballot initiative that will over time double the amount of bus service there;
  • Amalgamated Transit Union Local 726 on Staten Island, New York City, which organized riders and businesses to win dedicated bridge bus lanes, larger buses, and a fare cut that more than doubled ridership;
  • Move LA, a large business, labor and environmental coalition that has won legislation that will nearly double the size of Los Angeles County’s fixed-guideway transit system;
  • Ameriprise Financial, an investment services firm in Minneapolis that was the biggest early supporter of Metropass, enrolling 47 percent of its 6,000 downtown employees in the program’s first month;
  • Purple Line Now!, a business-backed coalition that is now winning a sorely needed arc-shaped light rail line connecting inner-ring suburbs and four subway “spokes” in the Maryland counties that straddle Washington, DC;
  • Transportation Management Association of Lake-Cook, a longstanding transportation demand management project with “Shuttle Bug” service linking corporate office parks and campuses north of Chicago with transit;
  • McCaffery Interests, a Chicago-based integrated development firm that specializes in large, mixed-use transit-oriented development (TOD) projects;
  • United Streetcar of Clackamas, Oregon, rebirthing the long-lost streetcar manufacturing industry in the United States with good union jobs and high domestic U.S. content; and
  • “Third-party administrators” such as WageWorks and Edenred that manage the business of collecting pre-tax income and providing monthly transit pass cards. This obscure niche industry has recently undergone a great deal of consolidation, and with the Association for Commuter Transportation, it advocates to ensure that federal tax benefits for transit are at parity with those for parking.

In sum, the study finds corporate support for transit in America to be remarkably broad and diverse, but also highly fragmented. Just when market forces and energy policy beg for a unified national employer voice for growing and improving transit service, what we find instead are disparate voices speaking only to selected transit issues.

“Public transit is far too important to be left only to those companies that make their business selling to transit agencies,” concluded LeRoy. “Far more numerous—and deserving to be heard—are those employers that depend on transit for their workforces. When will they organize nationally?”

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Study: Nissan’s Mississippi Subsidies Top $1.3 billion

May 17, 2013

Good Jobs First has just published a report (commissioned by the UAW) showing that the subsidies provided to Nissan by state and local governments in Mississippi amount to more than $1.3 billion–far more than has been previously reported. 

The report can be found on our website: A Good Deal for Mississippi?

Here’s an excerpt:

Over the past decade Nissan has created thousands of manufacturing jobs in Mississippi. While the Japanese automaker has spent considerable amounts of its own money, it has also received huge amounts of financial assistance from taxpayers at the local and state levels.

In this report we document the many varieties of economic development subsidies the company has been offered, among them corporate income tax credits, rebates of withholding taxes, site preparation and infrastructure grants, training grants, and property tax abatements. In all, the value of the state and local subsidies offered to the company in Mississippi is some $1.3 billion, considerably more than has been reported.

The Advantage Jobs payments offered to Nissan in Mississippi are part of a controversial category of subsidies in which an employer gets a rebate of a portion of the state withholding taxes deducted from the paychecks of workers. In an April 2012 Good Jobs First report entitled Paying Taxes to the Boss, we found that the 25-year, $160 million Advantage Jobs deal granted to Nissan was the largest withholding tax subsidy ever awarded.

Aside from the total amounts, the Nissan subsidies raise other issues. Mississippi legislators approved subsidies based on an overly optimistic cost-benefit analysis commissioned by the state’s development officials. Our report does not provide a full-blown alternative analysis, but it is clear to us that legislators were not given the complete picture on how much would end up going to Nissan.

Although they approved a package valued at $295 million, the real cost of the tax subsidies included in the deal made it worth hundreds of millions more. According to publicly available sources, the number of jobs created at the Nissan plant in Madison County has hovered around 4,500. With Nissan eligible for an estimated at $1.3 billion in assistance over the term of the subsidy programs, Mississippi taxpayers may end up paying around $290,000 per job.

Unfortunately, many of those jobs are not regular Nissan payroll positions. The figures from the state auditor show that around 20 percent are temps. In 2012, temporary employees started work at only about $12 an hour. Taxpayers have paid premium amounts for jobs that in many cases are far from premium. This, along with the fiscal difficulties we document in the community where the plant is located, suggests that the Nissan investments in Mississippi have provided a lot less net economic benefit than the company and public officials have claimed.

A Tale of Two States (and Subsidy Transparency)

March 15, 2013

Florida and Mississippi may come close to sharing a border, but they are worlds apart in their current approach to the disclosure of economic development subsidies.

Florida has just launched an Economic Development Incentives Portal that makes it easy to discover which companies have benefited from programs such as the Quick Action Closing Fund, the Qualified Target Industry Tax Refund and the High Impact Performance Incentive.

Online subsidy disclosure is not completely new to Florida. An agency called the Governor’s Office of Tourism, Trade and Economic Development used to post a PDF list of recipients for various programs. After Rick Scott took office as governor in 2011, that agency was put under the auspices of the new Department of Economic Opportunity, and the old disclosure site disappeared. DEO promised to restore transparency and has now made good on that promise.

The new portal, produced by DEO in partnership with Enterprise Florida, covers a dozen programs with a total of about 1,250 entries, including “every non-confidential incentive project with an executed contract since 1996 that received or is on schedule to receive payments from the state of Florida.” DEO promises to add listings for confidential projects as their exemptions from disclosure requirements expire.

Searches can be targeted according to business name, county or date range. The results show company name, industry, subsidy value, county, approval date and project status. They also include both committed and actual numbers for jobs and investment, though in many cases the performance figures are listed as not available. The portal also includes projects that are inactive or have been terminated.

Florida’s portal is an important advance for subsidy transparency. The site would be even more useful if it included street addresses for the subsidized facilities (to facilitate mapping) and allowed downloading of search results in spreadsheet form.  At my request, DEO sent such a spreadsheet for the entire database, which I used both to prepare this piece and to upload the information to Subsidy Tracker.

Mississippi, on the other hand, is resisting online disclosure. The state legislature recently killed a bill that would have required the Mississippi Development Authority to publish an annual report on the tax credits, loans and grants it provides to companies in the name of economic development.

It turns out that the agency produced such a report for internal purposes but did not make it public. A group called the Bigger Pie Forum learned about the document—the 2012 Mississippi Incentives Report—and filed a successful freedom of information act request. Bigger Pie was only able to get a hard copy, but it scanned the report and has posted it online here. The info in that report has also been added to Subsidy Tracker.

Despite the reluctance of state legislators, online subsidy disclosure has come to Mississippi. Perhaps the Magnolia State will realize the futility of resisting official transparency and join the Sunshine State, among about 45 others, in making subsidy information directly available to the public via the web.

Who Doesn’t Pay

January 30, 2013

At Good Jobs First we tend to focus on the ways that corporations get special tax deals from state governments, so it is helpful to be reminded that wealthy individuals also pay far less than their fair share. A definitive statement of this whopaysfact has just been published by our friends at the Institute on Taxation & Economic Policy in the latest edition of their report Who Pays.

The injustice of state taxation is summed up in the main finding of the report: “virtually every state’s tax system is fundamentally unfair, taking a much greater share of middle- and low-income families than from wealthy families.”

At a time when a number of red states are talking about replacing their personal income tax (PIT) systems with higher sales taxes, ITEP points out that the over reliance on consumption taxes (along with the absence of a graduated PIT) is a big part of the regressivity problem in many states.

ITEP notes that five of most regressive states—Washington, Florida, South Dakota, Illinois and Texas—derive half to two thirds of their revenue from sales and excise taxes, compared to a national average of about one third. The least regressive systems, by the way, are those in Delaware, the District of Columbia, New York, Oregon and Vermont.

Although the report does not focus on the corporate portion of state income taxes, it points out: “More than ten states gave away big breaks to profitable corporations either through rate cuts, a change in the apportionment formula used to calculate the corporate income tax, expanded exclusions, or the reduction or elimination of personal property taxes. These states include Arizona, Alabama, Florida, Idaho, Louisiana, Michigan, Missouri, North Dakota, Pennsylvania, and Wisconsin.”

Summing Subsidies

December 6, 2012

detectiveMy colleagues and I at Good Jobs First were excited at the publication of the New York Times series on the “United States of Subsidies,” since it brings a great deal of attention to a problem — corporate abuse of economic development assistance — that we have been working on for more than a decade.

We were also pleased to see the online database that the Times posted to go along with the articles. We had provided a copy of the master spreadsheet for our Subsidy Tracker database to Louise Story, the author of the series, and she made extensive use of it. Although the Times obtained some information from other sources, it appears that about 98 percent of their company-specific listings come from Subsidy Tracker. (SEE UPDATE BELOW.)

Now that we have had a few days to examine the Times database, we see that there are some flaws in the way the paper used our data.

First, a few words on Subsidy Tracker. In recent years, a growing number of states began to put company-specific information on at least some of their economic development awards—grants, tax credits, tax abatements, etc.—online. This was often in response to the subsidy accountability movement that we and our allies have built.

The problem was that these disclosures usually happened via hard-to-find reports and web pages that were often difficult to search even when you did locate them. Good Jobs First decided to collect all these disclosures and combine them into one national search tool. We introduced Subsidy Tracker in December 2010 with 43,000 listings from 124 subsidy programs in 27 states.

Over the following two years, we have expanded that to the current total of 247,000 listings from 409 programs in all 50 states and the District of Columbia. That expansion was not due entirely to wider official online transparency. Using open records requests, we also obtained unpublished data on scores of additional programs (the total is currently 89). By posting this information to Subsidy Tracker, we became, in effect, the original online disclosure source for these programs.

In recent months we’ve begun applying this approach to city and county subsidy programs, which are far behind their state counterparts in terms of online disclosure.

Despite all this effort, we recognized that we still could not claim to have captured anywhere near all the subsidy awards that have been made across the country. Not only did we still lack many programs, we also have irregular numbers of years of data among programs.  That’s why we have not yet built into Subsidy Tracker a feature that enables instant aggregation of all the awards going to a particular company.

Along with the remaining gaps in the data, there is much that needs to be done with regard to the listings we do have to allow accurate aggregation. This includes the standardization of the variations in company names in our source materials, linking of parent and subsidiary companies, and accounting for mergers and acquisitions. There’s also the problem that some states report subsidy amounts for single years and others for multiple ones. These challenges are all part of our future work plan.

After getting our raw data, the Times did not consult with us on exactly how it would be used. We thus had no opportunity to warn the paper against the perils of aggregation. Specifically, we were not aware of the paper’s plans to create what it calls its $100 Million Club.

It is with this listing that the pitfalls in the Times approach become most apparent. The companies that receive the largest subsidies often get them in the form of packages negotiated with state and local officials. These packages usually consist of awards from various programs and may also involve project-specific awards outside established programs. Some of these pieces of packages are not included in state disclosure channels. It is part of our plan to research packages through other means and add them to Subsidy Tracker as a separate category. We’ve already begun the process in the Key Deals section of the state pages of the Accountable USA section of the Good Jobs First website.

The Times supplemented the roughly 154,000 entries it took from Subsidy Tracker with about 2,000 listings the paper obtained on its own or from an expensive subscription service produced by a company called Investment Consulting Associates. This enabled the inclusion of entries that were gleaned from press releases but had not yet been reported in the official program lists we rely on for Subsidy Tracker.

Yet the $100 Million Club still ends up with numerous instances in which the totals understate the true amount the big subsidy grabbers have received.

For example, the Times lists a total of $338 million for Boeing, including $218 from South Carolina. Yet it has been estimated that the package Boeing got by locating a new Dreamliner assembly line in the Charleston area could be worth some $900 million.

Apple is said to have received a total of $119 million, yet the Times fails to include more than $60 million in subsidies the company got for a data center in North Carolina.

The Times $100 Million Club also misses some major recipients entirely, including Volkswagen, which got more than $500 million in connection with an assembly plant in Tennessee, and ThyssenKrupp, which got more than $1 billion in subsidies for a steel mill in Alabama.

And these only include deals dating back to 2007, which is the period the Times used in compiling its $100 Million Club. The larger Times database seriously understates the size of major deals that took place earlier. For example, it lists only $19.3 million for GlobalFoundries in New York State, even though the company took over a $1.2 billion deal originally offered to Advanced Micro Devices (which isn’t listed at all).

We applaud the Times for the great reporting that went into its United States of Subsidies articles, but the paper fell short when it came to the compilations featured in its database. Good Jobs First will continue to build our Subsidy Tracker tool and in the future will create what we hope will be a more accurate and complete version of a $100 Million Club.

(reposted from the Dirt Diggers Digest)

UPDATE

After this blog was posted, Louise Story contacted us with some concerns. She confirmed that 98 percent of the entries (a total of 152,729) in the Times database came from Subsidy Tracker, but she says the number of entries that came from other sources was actually 3,844 rather than the 2,000 we estimated. She added that in dollar terms, a subject we did not address in the blog, Tracker entries account for 67.3 percent of the total in the Times database. However, we cannot verify that number because the Times has not given us its underlying spreadsheet.

Story also believes that the blog should have mentioned the fact that she contacted me several weeks ago to say that the articles and database would be published soon and in effect told me about her aggregation plans. She did indeed contact me but gave the impression that her work was completed, meaning that an effort to suggest any changes in methodology would have been moot at that point.

Good Jobs First’s Subsidy Tracker Used in New York Times Reportage

December 2, 2012

Good Jobs First’s Subsidy Tracker Used in New York Times Reportage

Washington, DC, December 2, 2012—The database created by the New York Times to accompany its new series on economic development incentives draws heavily from Good Jobs First’s Subsidy Tracker search tool launched in 2010.

“We worked closely with the Times and are pleased to have contributed what appears to be a large majority of the company-specific information the paper used for its excellent online feature,” said Philip Mattera, Research Director of Good Jobs First and creator of Subsidy Tracker, which can be found at http://www.goodjobsfirst.org/subsidy-tracker

“Subsidy Tracker has become the best-practice standard for states to disclose their economic development spending,” said Good Jobs First executive director Greg LeRoy. “States as politically diverse as Tennessee and Maryland have publicly acknowledged our technical assistance in launching or improving their disclosure websites. We also know that high-level officials in more than 30 states have responded to our 50-state report-card studies on transparency, job creation and enforcement.”

In the Times’ methodology page and every search display page, the main sources of company data listed are Good Jobs First’s Subsidy Tracker Database and Investment Consulting Associates. The latter is an expensive subscription service covering fewer than 5,000 U.S. deals going back only to 2010, while Subsidy Tracker is free, has nearly 250,000 entries with some programs covered back more than a decade, and spans more than 400 programs in all 50 states and the District of Columbia. Subsidy Tracker also incorporates information from the Good Jobs New York database, which has more detailed entries on subsidies awarded in New York City.

Subsidy Tracker’s company-specific coverage also goes far beyond that of the Times’ database, which is limited to recipients of total subsidies in excess of $1 million. And whereas the Times aggregates the awards larger recipients received in each state into a single figure, Subsidy Tracker provides details on all the individual awards, including links back to official data sources and, when available, figures on the number of jobs and wage levels projected and/or created with each subsidy. When disclosed, Subsidy Tracker also provides project street addresses, enabling users to map and analyze the geographic distribution of the awards.

Much of the data in Subsidy Tracker first existed in far-flung sources and formats that were neither retrievable nor searchable. Much data had to be captured by customized software “scraping” programs.

Subsidy Tracker also contains previously unpublished data Good Jobs First obtained from state and local government agencies via open records requests. “Posting this unpublished data makes Subsidy Tracker, in effect, the original disclosure source for dozens of subsidy programs,” Mattera said. “We are continuing our effort to expand this portion of Subsidy Tracker’s inventory, especially with regard to city and county programs, which are far behind their state counterparts in terms of online availability.”

Good Jobs First is a non-profit, non-partisan partisan resource promoting accountability in economic development and smart growth for working families. It was founded in 1998 and is based in Washington, DC.

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Study: ALEC’s Jobs Advice Fails States

November 28, 2012

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Washington, DC—A new study finds that state tax and regulatory policies recommended by the American Legislative Exchange Council (ALEC) fail to promote stronger job creation or income growth, and actually predict a worse performance.

Since ALEC first published its annual Rich States, Poor States study with its Economic Outlook Ranking in 2007, states that were rated better have actually done worse economically.

Those are the key findings of “Selling Snake Oil to the States,” a study published today by Good Jobs First and the Iowa Policy Project and freely available online at http://www.goodjobsfirst.org/snakeoiltothestates.  It was released at a press conference the same week ALEC holds its annual fall meeting in Washington, DC. 

“We tested ALEC’s claims against actual economic results,” said Dr. Peter Fisher, primary author of the study. “We conclude that eliminating progressive taxes, suppressing wages, and cutting public services are actually a recipe for economic inequality, declining incomes, and undermining public infrastructure and education that really matter for long-term economic growth.”

The study dissects the methodology used by ALEC’s lead author Arthur Laffer and his co-authors. It finds that their arguments and evidence range from deeply flawed to nonexistent, consistently ignoring decades of peer-reviewed academic research. Instead, Laffer et al repeatedly engage in methodologically primitive approaches such as two-factor correlations and comparing arbitrary small numbers of states instead of all 50.

The study finds that the composition of a state’s economy—whether it has disproportionate shares of high-growth or low-growth industries—was a far better predictor of a state’s relative success over the past five years.

“State corporate income taxes average less than one-fifth of one percent of the average company’s costs.” said Fisher. “The ALEC/Laffer studies would have state leaders ignore site-location basics and disinvest public goods that benefit all employers.”

Good Jobs First is a non-profit, non-partisan partisan resource promoting accountability in economic development and smart growth for working families. It was founded in 1998 and is based in Washington, DC. The Iowa Policy Project is a nonpartisan, nonprofit organization promoting public policy that fosters economic opportunity while safeguarding the health and well-being of Iowa’s people and environment. It was formed in 2001 and is based in Iowa City.

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