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Tracker Surpasses 400 Programs As It Captures More Local Data

November 19, 2012

The Good Jobs First Subsidy Tracker database reached a new milestone as the number of programs from which it draws information passed 400. Tracker now has more than 247,000 entries from 409 programs in all 50 states and the District of Columbia.

Most of the latest additions are the results of our effort to obtain data from cities and counties. Given that localities are far behind states in putting subsidy information online, most of what we gather is unpublished information obtained via informal and formal open records requests to economic development agencies.

The localities for which we have just added such information are: Albuquerque, Baltimore; Kansas City, Missouri; Columbus, Ohio, Grand Rapids, Michigan; Janesville, Wisconsin; and Bloomington, Indiana.

We also got unpublished data on Alaska’s Oil and Gas Production Tax Credits and Louisiana’s Gulf Opportunity Zone bond program. The latter is technically a federal program, but the bond allocations are made by the Louisiana State Bond Commission.

Here’s a complete list of the recent additions:

  • Alaska: Oil and Gas Production Tax Credits (2009-2010)
  • Indiana: Bloomington Sustainable Partnership Grant (2009-2011)
  • Indiana: Bloomington Urban Enterprise Zone Incentives (2009-2011)
  • Louisiana: Gulf Opportunity Zone Program (2006-2011)
  • Maryland: Baltimore Development Corporation Brownfields Program (2012)
  • Maryland: Baltimore Development Corporation Business Assistance Programs (2005-2010)
  • Maryland: Baltimore Development Corporation Loan Program (2005-Oct 2012)
  • Maryland: Baltimore Development Corporation PILOTs (2003-Oct 2012)
  • Maryland: Baltimore Development Corporation TIF Projects (2003-Oct 2012)
  • Maryland: Baltimore Enterprise Zones (2005-Oct 2012)
  • Michigan: Grand Rapids Brownfield Redevelopment Program (2005-Oct 2012)
  • Michigan: Grand Rapids Industrial Facilities Property Tax Exemptions (2005-Oct 2012)
  • Michigan: Grand Rapids New Personal Property Exemptions (2005-Oct 2012)
  • Michigan: Grand Rapids Obsolete Property Rehabilitation Act Exemptions (2005-Oct 2012)
  • Michigan: Grand Rapids Renaissance Zone Extensions (2005-Oct 2012)
  • Michigan: Grand Rapids Tool & Die Renaissance Zones (2005-Oct 2012)
  • Missouri: Kansas City Enhanced Enterprise Zone Local Property Tax Abatement (2009-Aug 2012)
  • Missouri: Kansas City LCRA Property Tax Abatement (2009-Aug 2012)
  • New Mexico: Albuquerque Industrial Revenue Bonds (2008-Aug 2012)
  • Ohio: Columbus Downtown Office Incentive (2009-2011)
  • Ohio: Columbus Enterprise Zone (2009-2011)
  • Ohio: Columbus Jobs Growth Incentive (2009-2011)
  • Wisconsin: Janesville Development Opportunity Zone Tax Credits (2009-Oct 2012)
  • Wisconsin: Janesville TIF Forgivable Loans (2009-Oct 2012)

Lessons from Katrina in Dealing with Sandy

November 12, 2012

The many billions of dollars needed to repair the devastation caused by Hurricane Sandy in the New York metropolitan area will come from many sources.

Among those will likely be new tax-exempt private-activity bonds authorized by the federal government. Such bonds provide low-cost financing because the interest they pay is exempt from federal, state and local income taxes.

Already, the Council of Development Finance Agencies has issued a call for the creation of Hurricane Sandy Recovery Bonds.

Such an initiative would, as CDFA acknowledges, be patterned on the Gulf Opportunity Zone Bonds enacted by Congress in 2005 to help the economies of Louisiana, Mississippi and Alabama recover from Hurricane Katrina. The three states were given a total of $14.9 billion in GO Zone bond allocations.

So how did GO Zone bonds work out for the Gulf states?

Not very well. Soon after the GO Zone process began, Good Jobs First published a report commissioned by Interfaith Worker Justice that warned of pitfalls in the way the program was structured. We pointed out that because Congress qualified large swaths of the three states for the financing, areas that were not hit hard by the storm would get a disproportionate share of the assistance. We also predicted that big portions of the funding would be gobbled up by large corporations.

Unfortunately, our concerns turned out to be valid. According to data we’ve just obtained from the Louisiana Bond Commission, Orleans Parish (i.e. New Orleans) used only 3.3 percent of the state’s GO Zone bond allocation, while most of the money went to parishes that are dominated economically by the petrochemical industry, both those in “Cancer Alley” between New Orleans and Baton Rouge and those in the southwestern part of the state.

The Bond Commission data also make it clear that some giant corporations did, in fact, get outsized allocations. For example:

  • Marathon Oil got $1 billion for a refinery project in St. John the Baptist Parish;
  • Nucor got $600 million for its steel operation in St. James Parish;
  • Exxon Mobil got a total of $522 million for three projects in East Baton Rouge Parish; and
  • Valero Energy got $300 million for a hydrocracker at its refinery in St. Charles Parish.

Some big companies went to the GO Zone trough multiple times. International-Matex Tank Terminals, which operates bulk liquid storage facilities, received a total of $490 million for eight different projects. Westlake Chemical Corporation, whose products include polyvinyl chloride and plastic food wrap, received a total of $439 million for six different projects.

We predict now that, absent targeting safeguards, Hurricane Sandy Recovery Bonds would follow the same pattern. They might very well go to some of the same giant petrochemical corporations that do business in Louisiana for their New Jersey facilities or to megabanks in Manhattan that may not have suffered serious storm damage—and in any case can afford to pay for their own recovery.

This can be avoided by intentionally targeting the assistance to the hardest-hit areas and to small businesses which need the most help accessing low-cost credit.

We will be monitoring these developments through our Good Jobs First affiliate Good Jobs New York, which has been the leading watchdog on the reconstruction funds that flowed into New York City in the wake of the 9/11 attacks. These funds had many of the same injustices as GO Zone bonds. Of the $8 billion in triple tax-exempt private activity bonds specially enacted by Congress for Lower Manhattan, more than 20 percent, or $1.65 billion, went to Goldman Sachs alone for its new headquarters building.

GJNY is urging that Sandy aid programs be structured intentionally so that small businesses get priority over giant ones and that accountability and sustainability principles be applied. Let’s take lessons from Katrina and 9/11 so that Sandy reconstruction money does not repeat those troubled histories.

Calling All Citizen Journalists – Let’s Investigate and Expose TIFs!

October 23, 2012

GUEST POST BY TOM TRESSER

I’m looking for citizen journalists to help investigate and expose Tax Increment Finance (TIF) district abuse in Chicago and Cook County–and then across Illinois. You probably know that TIFs are an often abused mechanism for funneling property taxes to special projects–ostensibly to fight “blight” and put development in under-served areas. In Chicago companies such as Home Depot, United Airlines, the Chicago Mercantile Exchange, Coca-Cola, UPS, Jewel-Osco, Target and Willis Insurance (who bough the Sears Tower) hav eall received tens of millions of dollars of property tax gifts via Chicago’s poorly monitored TIF program. So much for blight and the under-served getting development help!

I’m working on a new social venture enterprise, The CivicLab, to be a place for ongoing civic investigation and innovation. Our first effort is the TIF Report which is looking at the impacts of TIFs on a ward-by-ward basis in Chicago. We are developing data scrapping and visualization tools to bring the TIF story to life here. We are looking for writers, coders, web developers, app developers and graphic artists to help with this work.

This is a rough draft of the poster-size graphic our team is working on to illustrate what TIFs are and how much property tax the 12 TIFs that cover the 27th Ward on Chicago’s Near North side have diverted from local government over the past nine years. The idea is to publish this information on an easy-to-navigate web site AND distribute several thousand of these graphic posters through out the ward and meet with community groups to walk them through the information.

I came to the TIF work via my efforts to derail Chicago’s 2016 Olympic bid in 2009. As a co-organizer for No Games Chicago I was part of a group of all-volunteer concerned citizens that thoroughly debunked the hype surrounding Mayor Daley’s pet project that consumed the city for two years and which raised $90 million for marketing and expenses.

Part of the frame for pushing the bid was that the city was broke, but we sorted through local finances and came across a pot containing $1.4 billion in property taxes! These funds were found in the combined bank accounts of the city’s then 160 Tax Increment Finance districts. We had to get the separate reports of these districts and open them up, one at a time, and total the “Fund Balance” figures for each district.

No one had done that. No one (outside of City Hall) knew that these bank accounts held so much money. This was especially galling since the city was closed for three furlough days in 2009, public health clinics were closed, public schools were closed and the public transit system was placed on a budgetary “doomsday watch” twice.

We realized that the city was lying about its financial situation and making it impossible to maintain and grow essential public services – and, instead, were showering hundreds of millions of public dollars on private developers and well-known and well-off corporations. We started to really look into TIFs and other corporate give-aways.

TIFs have been around in Chicago since 1986 but they really started to take off in the early-mid-1990’s – some would say co-incidental to the rise of pin-stripe patronage in Chicago. TIFs and local government

Finance used to be covered by Jackie Leavey and the Neighborhood Capital Budget Group, but they are out of business. When 5th District Congressman Mike Quigley was a Cook County Commissioner, he was deeply involved in TIF reform efforts. The two top experts in Chicago now would have to be political reporter Ben Joravsky (see his work at http://www.chicagoreader.com/chicago/the-chicago-reader-tif-archive/Content?oid=1180567) and Prof. Rachel Weber of the University of Illinois at Chicago (Prof. Weber is on the CivicLab Advisory Council).

TIFs are coming out of the shadows and a number of civic players are angling to end them, use them or re-direct them. The Chicago Teachers Union foregrounded TIFs in their recent strike communications and pointed out that the city couldn’t be THAT strapped for cash if a TIF in the Hyde Park community was poised to shower $5.2 million on the construction of a Hyatt Hotel on property owned by the University of Chicago. Sweet Home Chicago is a coalition of social service groups seeking TIF funds for affordable housing initiatives. And the RAISE Your Hand Coalition is a city-wide group of parents of public school parents who also want money in the TIF accounts to go the Board of Education.

We see this as a national effort because TIFs are in every state but two and are subject to widespread abuse and lack of accountability. If you are interested in joining this combination of old school investigation, new school data visualization, and community organizing, please contact Tom Tresser at tom@tresser.com or 312-804-3230.

Subsidy Tracker Captures 18,000 New Listings

October 11, 2012

In the past month, the Good Jobs First Subsidy Tracker database has added more than 18,000 new listings of subsidy awards, bringing the search engine’s inventory to more than 245,000 company-specific entries from 385 programs in all 50 states and the District of Columbia.

Some of the new content comes from our effort to expand Tracker’s scope from state-level programs to those at the city and county level. This process is time-consuming, given that few localities put subsidy data online, and we must thus rely on open records request to get the information. Over the past month we have gotten replies to a dozen of those requests and uploaded the results. These include: enterprise zone data from Richmond, Virginia; municipal tax increment financing data from three cities in Maine (Portland, Bangor and Lewiston); property tax abatement data from South Bend, Indiana and San Antonio, Texas; and data on miscellaneous programs from places such as Oklahoma City and Asheville, North Carolina.

We’ve also used FOIAs to fill in some state-level programs that were previously undisclosed: Mississippi’s Major Economic Impact Act grants and the Tennessee Job Skills training cost reimbursement program.

Yet by far the largest source of new information was our painstaking update of the data disclosed by state agencies on the web. In recent weeks we have scanned more than 250 such sites covering some 300 programs and have retrieved new data for nearly half of them. (Most sites post new information annually.) Having completed this, we can now turn our full attention back to the hunt for locality data.

A complete list of the additions can be found in the Tracker update log. The full inventory of data sources is here.

New Model Legislation from Good Jobs First

October 10, 2012

Washington, DC, October 10, 2012 — Good Jobs First today released an updated version of its model state legislation to make economic development subsidy programs more accountable and effective. It can be found at: http://www.goodjobsfirst.org/accountable-development/model-legislation

 

“This model legislation is informed by our many years of grading the states on their economic development program rules,” said Good Jobs First executive director Greg LeRoy. “At a time when states must make painful budget decisions, taxpayer subsidies in the name of jobs should be transparent, fair and effective.”

“Our model language is derived from the best state and local laws Good Jobs First has found while issuing six 50-state “report card” studies, including Show Us the Subsidies, Money for Something and Money-Back Guarantees for Taxpayers,” said Good Jobs First research director Phil Mattera. “These are proven, common-sense safeguards that every state should consider as a baseline.”

The legislation is designed to apply to every major kind of economic development subsidy that a state legally enables and which in turn is administered by either the state or by local governments. They include: corporate income tax credits (for job creation or retention, research and development, film production, etc.); property tax abatements and reductions; enterprise zones; tax increment financing districts; training grants; loans and loan guarantees; sales tax exemptions and rebates, and others.

The model legislation has four parts:

Disclosure: company-specific annual reporting on the Web of the costs and benefits of every deal, including Unified Reporting of Property Tax Abatements and Reductions to disclose online when local property taxes are lost that would otherwise fund schools and other local services;

Job Creation and Job Quality Standards: to make sure the cost per job is not excessive and that public subsidies help to raise living standards, not lower them;

Clawbacks and Rescissions: to ensure that deals are carefully monitored and that companies pay subsidies back (or lose future subsidies) if they fail to deliver on jobs or other community benefits;

Unified Economic Development Budget: to provide state legislators with a full annual accounting of every kind of expenditure the state makes for jobs to make sure that any budget cuts are fairly applied to less-visible corporate tax breaks, not just appropriations such as grants or loans.

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Good Jobs First http://www.goodjobsfirst.org is a non-profit, non-partisan resource center promoting best practices in state and local economic development and smart growth for working families. Based in Washington, DC, it includes Good Jobs New York http://www.goodjobsny.org.

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Subsidy Tracker Adds Data from Alabama to Hawaii

September 5, 2012

Subsidy Tracker, the Good Jobs First database of economic development subsidy awards to companies, is continuing to expand its inventory of local programs while filling in some state ones as well. Data on a dozen programs has just been uploaded, bringing Tracker’s coverage to more than 227,000 awards from 368 programs in all 50 states and the District of Columbia.

The newest additions are of three types.  First, there are statewide compilations of subsidies given out at the local level: Alabama’s Industrial Development Grants; tax increment financing in Nebraska and Oklahoma; and Tennessee’s PILOT agreements. Second, we have a couple of state programs: Hawaii’s Employment and Training Fund Statewide Grants and Louisiana’s Motion Picture Industry Development Tax Credits.

Finally, there are some datasets on specific local programs: property tax abatement data from the Kansas cities of Lawrence and Manhattan as well as Fort Worth and Dallas County in Texas; Cincinnati’s Property Investment Reimbursements; and the city of Virginia Beach’s Economic Development Investment Program.

The information was obtained in several cases from newly discovered online documents; in all but one of the rest we obtained unpublished data from government agencies. The Louisiana film subsidy data was obtained by the Louisiana Budget Project, which agreed to let us use it as well.

For ready reference, here is a list of all the new datasets:

Alabama: Industrial Development Grant (2007-Jan 2012)
Hawaii: Employment and Training Fund Statewide Grants (2007-2011)
Kansas: Lawrence property tax abatements (2011)
Kansas: Manhattan property tax abatements (2011)
Louisiana: Motion Picture Industry Development Tax Credit (2009-2011)
Nebraska: Local tax increment financing (2011)
Ohio: Cincinnati Property Investment Reimbursement (2001-Aug 2012)
Oklahoma: Local tax increment financing (2011)
Tennessee: County PILOT agreements (2011)
Texas: Dallas County property tax abatements (1988-2011)
Texas: Fort Worth property tax abatements (2000-Jun 2012)
Virginia: Virginia Beach Economic Development Investment Program (1991-Jun 2012)

Will Aircraft Industry Follow Autos with Subsidies and Weakened Unions?

August 9, 2012

Guest post by Kenneth Thomas

The growth of subsidized competition that undermined the auto industry and the United Auto Workers may now be happening in the aircraft industry. First came the 2009 announcement that Boeing would build a second assembly line for the 787 Dreamliner in South Carolina rather than Washington state due, at least in part, as company officials publicly stated, to unhappiness with its dealings with the International Association of Machinists. Then, on July 2, it was announced that Airbus would begin assembling its A-320 airliner in Mobile, Alabama. In both cases, the facilities received substantial subsidies to build non-union facilities. This is especially ironic in the case of Airbus, since its European facilities are, of course, unionized.

The South Carolina package for Boeing is thought to be worth over $900 million  to open a new assembly line for the Dreamliner. That project is expected to create 3800 non-union jobs in the state. It was also the subject of a huge labor dispute after Boeing CEO Jim Albaugh said that the decision had been motivated by strikes at its facilities in Washington (http://motherjones.com/kevin-drum/2011/09/quote-day-boeing-vs-nlrb, h/t Matt Yglesias). This was a no-no: the National Labor Relations Act protects workers who exercise their rights to form a union or to strike from retaliation by the company. This prompted a National Labor Relations Board complaint from the Machinists union, which was eventually dropped when the company agreed to locate production of the new 737 MAX in Renton, Washington, and signed on to a four-year contract extension (http://seattletimes.nwsource.com/html/businesstechnology/2016901106_boeingiam01.html, h/t Talking Points Memo).

Airbus’ new $600 million facility in Alabama is projected to create 1000 jobs, also non-union. Initial reports put subsidies to the company at $158.5 million from the state and various local governments (thanks to @varnergreg for pointing out this article). Remember, though, that initial reports are more likely to underestimate subsidies than overestimate them, as in the case of Electrolux in Memphis. However, if this is remotely near accurate, Alabama got a much better deal for Airbus than did Washington state for the Boeing 787 Dreamliner, giving tax breaks equal to an almost $2 billion cash grant, which was 220% of the investment and $1.65 million per job (according to my calculations for Investment Incentives and the Global Competition for Capital), more than 10 times the per job cost in Alabama.

Unfortunately, these developments could repeat the example of the subsidization of new automotive facilities that hastened the decline of Detroit’s Big Three and weakened the UAW. According to economic geographer James Rubenstein (1992, Table 1.1), from 1979 to 1991 there was a 1 to 1 correspondence in the opening and closing of new automobile and truck assembly plants in the U.S. and Canada: 20 new ones were built, 20 old ones were closed. Every one of the new facilities received subsidies from state and local (or federal and provincial, in Canada) governments. Given that the automobile industry was in a position of overcapacity for much of that period, it is no surprise that new production simply displaced older production.

Will the same thing now happen in the aircraft industry? Globally, Airbus has been putting market share above profits since the early 2000s. With its current move to Alabama, CEO Fabrice Brégier said the company hoped to grow its U.S. market share for single-aisle planes (the A-320 competes mainly with the Boeing 737) from 17% to 50% over the next 20 years. If Airbus is successful, it would be bad for the 80,000+ employees in Boeing’s Commercial Airplanes group.

Of course, there is growing global demand for airliners, especially in Asia. But China has already developed its own competitor in the single-aisle market and Airbus is building A-320s in Tianjin, China, making it unclear how much of the global growth can translate into increased U.S. employment.

As was the case with automakers, the competition for facilities allowed Boeing and Airbus to extract rents through the site selection process and getting non-union labor as well as subsidies. By repeating this process for projects large and small, state and local governments deprive themselves of as much as $70 billion per year in revenue, enough to hire all state and local employees laid off since the recession began in December 2007. At the same time, over the long haul, the process in the auto industry replaced well-paid unionized workers with less well-paid, non-union workers.  The prospect that this evolution could be repeated in the aircraft industry is a pretty depressing one, when all is said and done.

(This post is a revision of an earlier version at Middle Class Political Economist, Alabama’s Airbus Subsidy Eerily Reminiscent of Auto “Transplants”.)

Tracking More Subsidies in California, Texas and Michigan

August 6, 2012

Subsidy Tracker, the Good Jobs First database of economic development subsidy awards, has just grown by more than 40 percent and now has more than 224,000 entries from 356 programs.

Most of the increase comes from a list of more than 60,000 businesses in Los Angeles currently enjoying exemptions from the city’s gross receipts tax. We obtained the previously unpublished data from the city’s Office of Finance as part of our effort to expand Tracker’s coverage of local subsidy programs.

Also included in the latest additions are local property tax abatement data from Texas counties for the period 2000-2009 assembled by the state comptroller. From officials in Dallas we obtained unpublished listings of tax increment financing deals as well as grants and loans under the city’s Public/Private Partnership Program.

Finally, the latest additions include the Industrial Facilities Property Tax Exemptions awarded by localities throughout Michigan for the period from 2007 to 2011.

New Disclosure Data from Tennessee and New York Captured in Subsidy Tracker

July 3, 2012

Tennessee has joined the ranks of those states (now up to 45 plus DC) that disclose which companies are receiving financial assistance from at least some subsidy programs.

Meanwhile, New York has issued the first disclosure report for its new Excelsior Jobs Program, which replaced the notorious Empire Zones. We have already incorporated the new info from both states in Subsidy Tracker, the Good Jobs First national database of subsidy awards.

It is encouraging to see that Tennessee, which long resisted transparency, has begun to bring its subsidies out of the shadows. The state’s Department of Economic and Community Development put up a website that shows the companies participating in the FastTrack Training Job Training Assistance and FastTrack Infrastructure Development programs since the beginning of this year. Earlier awards are covered in employment audits (which include a racial breakdown of workers in the jobs created) but these documents do not show the subsidy amounts. The site also has info on the state’s Film Incentives, but only the name of the movie, not the name of the production company getting the assistance, is displayed.

The FastTrack disclosures, which come after representatives of the DECD consulted with Good Jobs First, are a good first step, but the site cannot yet be considered an exemplary disclosure source. For example, the current PDF lists need to be supplemented with a searchable search engine and/or downloadable spreadsheet. The entries should include additional information such as the full address of the subsidized facility. Tennessee officials say they are committed to improving the site. Hopefully, this will include the inclusion of disclosure data on the state’s Jobs Tax Credits and Super Jobs Tax Credits.

New York’s Empire State Development agency has finally posted the first Excelsior Jobs report in the form of a PDF list of the companies that have been admitted into the program—along with their maximum potential tax credit and their commitments on job creation and investment. Another PDF shows the small number of companies that have already been issued tax credits. This site needs enhancements like those prescribed for Tennessee.

As part of our effort to expand Subsidy Tracker’s coverage of city and county programs, we have just uploaded data obtained from the Missouri State Auditor on payments to developers in all of the state’s many local tax increment financing districts.

Tracker’s latest batch of enhancements also includes unpublished data on companies benefiting from the the Business Industry Training and Existing Workforce Training programs in Arkansas and South Carolina’s readySC training program.

Tracker now contains more than 155,000 entries from 351 programs in all 50 states and the District of Columbia.

Subsidy Tracker Starts to Take On Localities

May 30, 2012

Subsidy Tracker, the Good Jobs First database on economic development subsidy awards, has begun its expansion from state programs to local ones. To kick things off, we have added more than 20,000 listings from New York City, Chicago and Miami.

The bulk of these are entries from NYC-specific programs that had been collected by our affiliate Good Jobs New York for its Database of Deals. Each item displays basic information while also providing a link to the GJNY website for additional details. We also have data on Chicago’s tax increment financing program going back to the late 1980s as well as info for Miami-Dade County’s Targeted Jobs Incentive Fund. We haven’t forgotten about state programs. Among the new entries are training reimbursement subsidies in Florida, Iowa and Louisiana.

Subsidy Tracker now contains more than 153,000 entries from 335 programs in all 50 states and the District of Columbia.

Here is a complete list of the latest additions:

  • Florida: Incumbent Worker Training (FY2010 to Apr 2012)
  • Florida: Miami-Dade County: Targeted Jobs Incentive Fund (2003 to May 2012)
  • Florida: Quick Response Training (FY2010 to Apr 2012)
  • Illinois: Chicago: Tax Increment Financing (1987 to May 2012)
  • Iowa: Industrial New Jobs Training (260E) (2002 to May 2012)
  • Louisiana: LED FastStart (2009 to 2011)
  • Nevada: Personal Property Tax Abatement (FY1999-FY2008)
  • Nevada: Real Property Tax Abatement (FY1999-FY2008)
  • New York: NYC: Commercial Growth Project (1986 to 2011)
  • New York: NYC: Industrial Incentive Program (1986 to 2011)
  • New York: NYC: Job Creation and Retention Program (2002 to 2009)
  • New York: NYC: Manufacturing Facilities Bond (1986 to 2011)
  • New York: NYC: Small Firm Attraction and Retention Grant (2002 to 2008)
  • New York: NYC: Small Industry Incentive (1986 to 2011)
  • New York: NYC: World Trade Center Business Recovery Grant (2001 to 2004)
  • Texas: Enterprise Zones (2003 to 2010)