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Exposing Wasteful Subsidies
to Bolster State and
Local Revenues
Greg LeRoy
Executive Director
Good Jobs First
AFSCME Convention
July 15, 2014 ~ Chicago
Call Them What You Will
 “Business
Incentives” (misleading)
 “Corporate
 “Job
Welfare” (confusing)
Subsidies” (preferred)
$70 Billion per Year!
Property Tax Abatements
 Tax Increment Financing (TIF) Districts
 Corporate Income Tax Credits
 Sales Tax Exemptions
 Tax-free Loans (“IRBs” or “IDBs”)
 Enterprise Zones
 Training Grants
 Land Write-downs
 Infrastructure Aid

Site Location 101
Site Location 101, cont.

Public officials in “prisoners’ dilemma”

“Job blackmail,” “Economic war among the
states” (and suburbs)

Unregulated site location consultants
Deal Flow Still Depressed
6
But Megadeals Are Surging
And So Are Their Costs
Problem #1
Popular Economic
Miseducation
Problem #2
Too much retail
Problem #3:
Fuel
for
sprawl
Problem #4:
Lack of
coordination
with transit
and training
Problem #5:
Covert
budget
erosion
Problem #6:
Bias against
small, local entrepreneurs
Demand Disclosure!

Annual, company-specific reporting of the
deal (costs) and outcomes (benefits)

On the Web, accessible, searchable,
downloadable

Time for a Report Card!
Transparency = Cornerstone
Job shortfalls > Clawbacks, Rescissions
 Poverty wages > Job quality standards
 Excessive costs > Elimination, caps
 Bias against urban poor > Targeting, Cuts
 Hogged by big business > Cuts, reforms
 Huge $ to Wal-Mart > Site-fight tool
 Subsidies to privateers > Site-fight tool
 Big $ to political donors > Reforms

1995 InfoBeachhead
MAPA
2007
2010
2014
But…Outcomes Often Missing!
Subsidy Tracker
First-ever searchable 50
states + DC + localities
database of companyspecific subsidy data
Subsidies, Loopholes v Pensions

States’ subsidies + loopholes all exceed
pension obligations: AZ, CA, CO, FL, IL,
LA, MI, MO, OK, PA
Offshore corporate tax dodging
 Delaware and Nevada loopholes
 Hollywood film tax credits
 Corporate income tax credits

Localities Least Transparent

2/3rds of big cities & counties fail to
disclose

Deadbeats include Charlotte, Cook County
(Illinois), Dallas, Harris County (Texas),
Los Angeles (city and county), Miami-Dade
County, Philadelphia, and San Francisco.

Memphis, New York, Austin, Chicago get
top grades
Property Tax Abatements & TIF
Schools
are
biggest
losers
Striking
Chicago
teachers make
issue of TIF;
city becomes
hypertransparent
Chicago TIF versus Pensions

TIF now diverts 10% of Chicago property
tax revenue

TIF costs exceed pension obligations

Debate changes from Mayor 1 Percent’s
tax hike to TIF redirected for pensions
Truth in Taxation: Cook County!
$1B/yr in Sales
Tax “Skimming”

“Vendor Discount” – archaic
loophole

Illinois, Texas, Pennsylvania, Florida, Ohio,
New York, Georgia – all lose >$50M/yr

Illinois alone loses $115M/yr

Colorado, Virginia Big-$ reforms already
Grading Places & Selling
Snake Oil to the States
 Counter
right-wing “business climate”
snake oil
ALEC’s Rich States, Poor
States by Arthur Laffer
 Demolish
 Plus
Tax Foundation, Small Business
And Entrepreneurship Council,
Beacon Hill Institute
Fresh Fodder!
News Flash! Christie Spree
Spawns Campaign Finance Bill!
The Guardian July 11, 2014
New Jersey law would bar
donations from recipients of
subsidies
State senators propose bill to
prevent some donations following
reports on subsidies awarded by
Christie administration
Contact
Greg LeRoy
Good Jobs First
202-232-1616 x 211
[email protected]
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