Edited by Mary Kauffman
January 23 2012
These are the findings of Money-Back Guarantees for Taxpayers: Clawbacks and Other Enforcement Safeguards in State Economic Development Subsidy Programs, a study published by Good Jobs First, a non-profit, non-partisan research center in Washington, DC.
"It is not enough for states to have good job-creation and other performance requirements on paper in their subsidy programs; they must also enforce them diligently and consistently," said Good Jobs First Executive Director Greg LeRoy.
"Strong standards and strong enforcement are inseparable in making sure subsidy programs are not mere corporate giveaways," added Philip Mattera, research director of Good Jobs First and principal author of the report.
Using a scoring system covering performance standards and enforcement, Money-Back Guarantees rated 238 programs in 50 states and the District of Columbia on a scale of 0 to 100. The states with the lowest averages are the District of Columbia (4/100) and Alaska (19/100).
According to the Good Jobs First website, it is unclear how much Alaska spends in total on its economic development programs – Alaska focuses on the state’s dominant petroleum, mining and fishing industries – but the amount seems to be substantial for the fourth least populated state. For example, nearly $550 million in credits were claimed under the Clear and Equitable Share/Oil and Gas Production Tax Credit program in 2009 alone. The Development Finance Program had a loan balance of $364 million in 2009.
Alaska has also spent heavily on a handful of dubious pet development projects quoting Good Jobs First. The state invested more than $200 million in the Healy Clean Coal Project, which was ultimately shut down. In 1997, the state’s Industrial Development and Export Authority agreed to help finance the $125 million Alaska Seafood International processing plant, which also failed.
Two of the four Alaska programs looked at by Good Jobs First provided some online recipient disclosure: the Film Industry Tax Credit and the Development Finance Program. According to Good Jobs First, taxpayers are still in perpetual darkness on recipients of Commercial Fishing Revolving Loans and and the incredibly expensive Clear and Equitable Share/ Oil and Gas Production Tax Credits.
In December 2011, another report from Good Jobs First revealed that states nationwide spend billions on Economic Development Subsidies that don’t require job creation or decent wages -- spending billions of dollars per year on corporate tax credits, cash grants and other economic development subsidies that often require little if any job creation and lack wage and benefit standards covering workers at subsidized companies. These were the key findings of Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs, a 51-state “report card” study published by Good Jobs First. The District of Columbia, Alaska and Wyoming were rated the worst.
“With unemployment still so high, taxpayers have a right to expect that economic development investments create significant numbers of quality jobs,” said Good Jobs First Executive Director Greg LeRoy. “The days of ‘no strings attached’ are largely gone, but the fine print in many states is still full of gaps and loopholes.”
The states with the best average scores were: Nevada (82), North Carolina (79) and Vermont (77). The worst are: the District of Columbia (4), Alaska (5) and Wyoming (10). Twenty-three states scored above 40, the average for all states.
“If subsidies do not result in real public benefits, they are no better than corporate giveaways,” said Good Jobs First Research Director Philip Mattera, principal author of the report. “States should be using these programs to reduce unemployment and raise living standards, not simply to increase corporate profits.”
Edited by Mary Kauffman, SitNews
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