Smarter IncentivesSmarter Incentivesfor Good Jobsfor Good Jobs

Greg LeRoyGreg LeRoy

Executive Director, Good Jobs FirstExecutive Director, Good Jobs First

North East Regional North East Regional

Employment & Training AssociationEmployment & Training Association

Webinar ~ February 6, 2014Webinar ~ February 6, 2014

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Good Jobs First:Good Jobs First:A Resource for State and Local A Resource for State and Local

GovernmentsGovernments Many Tools @ www.goodjobsfirst.orgMany Tools @ www.goodjobsfirst.org Model Research and PublicationsModel Research and Publications Testimony, Training and SpeakingTestimony, Training and Speaking Technical AssistanceTechnical Assistance Subsidy TrackerSubsidy Tracker ““Report Card” StudiesReport Card” Studies

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~$70 Billion per Year!~$70 Billion per Year! Property Tax AbatementsProperty Tax Abatements TIF: Diversion of Property and Sales TaxTIF: Diversion of Property and Sales Tax Corporate Income Tax Credits Corporate Income Tax Credits Sales Tax Exemptions Sales Tax Exemptions Enterprise ZonesEnterprise Zones Land Write-downsLand Write-downs Infrastructure Aid Infrastructure Aid Personal Income Tax DiversionsPersonal Income Tax Diversions

Site Location 101Site Location 101 Business basics matter most (not tax Business basics matter most (not tax

breaks)breaks)

Public officials in “prisoners’ Public officials in “prisoners’ dilemma”dilemma”

““Job blackmail,” “Economic war Job blackmail,” “Economic war among the states” among the states”

Unregulated site location consultantsUnregulated site location consultants44

Transparency = Transparency = CornerstoneCornerstone

Job shortfalls > Clawbacks, RescissionsJob shortfalls > Clawbacks, Rescissions Poverty wages > Job quality standardsPoverty wages > Job quality standards Excessive costs > Elimination, capsExcessive costs > Elimination, caps Bias against urban poor > TargetingBias against urban poor > Targeting Hogged by big business > ReallocationHogged by big business > Reallocation Huge $ to Wal-Mart > Big-Box RegulationHuge $ to Wal-Mart > Big-Box Regulation Subsidies to privateers > Contract Subsidies to privateers > Contract

ReformReform Big $ to political donors > ReformsBig $ to political donors > Reforms

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20072007

66

20102010

77

20132013

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Show Us the Subsidized JobsShow Us the Subsidized Jobs

55% of major state ED programs 55% of major state ED programs name recipient, value of subsidyname recipient, value of subsidy

Only 1 in 4 reports actual jobs createdOnly 1 in 4 reports actual jobs created

Only 1 in 11 reports actual wages paidOnly 1 in 11 reports actual wages paid

IL, MI, NC best (but hardly passing IL, MI, NC best (but hardly passing grades)grades)

MS, KS and ID still in the darkMS, KS and ID still in the dark

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States with (at Least Some) States with (at Least Some) Exemplary Tax-Credit Exemplary Tax-Credit

DisclosureDisclosure IllinoisIllinois IowaIowa North CarolinaNorth Carolina MassachusettsMassachusetts MissouriMissouri Rhode IslandRhode Island Washington (sometimes…) Washington (sometimes…)

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IllinoisIllinois

1111

North CarolinaNorth Carolina

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IowaIowa

1313

MassachusettsMassachusetts

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Show Us the Local Show Us the Local SubsidiesSubsidies

2/3rds of big cities & counties fail to 2/3rds of big cities & counties fail to disclosedisclose

Deadbeats include Charlotte, Cook Deadbeats include Charlotte, Cook County (Illinois), Dallas, Harris County County (Illinois), Dallas, Harris County (Texas), Los Angeles (city and county), (Texas), Los Angeles (city and county), Miami-Dade County, Philadelphia, and Miami-Dade County, Philadelphia, and San Francisco. San Francisco.

Memphis, New York, Austin, Chicago get Memphis, New York, Austin, Chicago get top gradestop grades

Subsidy TrackerSubsidy Tracker

First-ever searchable 50 states First-ever searchable 50 states + DC + localities database of + DC + localities database of

company-specific subsidy datacompany-specific subsidy data

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Subsidy Snapshots in NYCSubsidy Snapshots in NYC

Visible at Visible at www.goodjobsny.org under under “Resources and Tools” “Resources and Tools”

Map deals by Community Board Map deals by Community Board Areas in each boroughAreas in each borough

Released with borough presidentsReleased with borough presidents

Offered to training providersOffered to training providers

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Detroit MSA Shutdowns 2001-Detroit MSA Shutdowns 2001-0404

MEGA Deals 2001-2004MEGA Deals 2001-2004

Twin Cities Metro Area: Subsidized Business Relocations(Mostly TIF),1999-2003

Twin Cities Metro: Subsidized Business Relocations’ Impact on Job Access via Transit

Solution: Align Solution: Align Development Subsidies Development Subsidies

with Transit Routeswith Transit Routes Make workplace access via transit an Make workplace access via transit an

eligibility requirement (or at least an eligibility requirement (or at least an application-rating preference) for an application-rating preference) for an incentiveincentive

California, Maryland, Illinois, New California, Maryland, Illinois, New Jersey have made small stepsJersey have made small steps

Job-Creation Shell GameJob-Creation Shell Game Multi-state metro areas (Kansas City, Multi-state metro areas (Kansas City,

Memphis, Charlotte, NYC)Memphis, Charlotte, NYC)

Job blackmail (Sears, Motorola Job blackmail (Sears, Motorola Mobility, CME and ADM in Illinois Mobility, CME and ADM in Illinois alone) (NJ, OH…)alone) (NJ, OH…)

Active-pirate states (Texas, Florida, Active-pirate states (Texas, Florida, New Hampshire, Rhode Island, New Hampshire, Rhode Island, Tennessee) Tennessee)

Solution:Solution:

De-monetize De-monetize Interstate Interstate Job FraudJob Fraud

Fresh Fodder!Fresh Fodder!

Boeing Exemplifies Trend: Boeing Exemplifies Trend: Stakes Are Higher Than Stakes Are Higher Than

EverEver Deal flow is depressedDeal flow is depressed

““Megadeals” are up in number and Megadeals” are up in number and costcost

So accountability really mattersSo accountability really matters

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Deal Flow is DepressedDeal Flow is Depressed

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But Megadeals Are But Megadeals Are SurgingSurging

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MegadealsMegadeals 240 deals @ $75 million to $5.6 billion 240 deals @ $75 million to $5.6 billion

(and now $8.7 billion)(and now $8.7 billion)

Number and cost up sharply since 2008Number and cost up sharply since 2008

Average cost per job: $456,000Average cost per job: $456,000

Only ½ to manufacturingOnly ½ to manufacturing

New York and Michigan (and now New York and Michigan (and now Washington is #1) = top spendersWashington is #1) = top spenders

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And So Are Their CostsAnd So Are Their Costs

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Paying Taxes Paying Taxes to the Bossto the Boss

16 states allow companies to 16 states allow companies to effectively keep some of employees’ effectively keep some of employees’ state personal income taxesstate personal income taxes

2,700 companies named in database2,700 companies named in database

Loss to states ~$700M/yearLoss to states ~$700M/year

PA, NJ developmentsPA, NJ developments

Job-Creation & Job-Creation & Job-Quality StandardsJob-Quality Standards

Money for Something Money for Something December 2011December 2011

60% of programs require job creation, 60% of programs require job creation, retention or traineesretention or trainees

40% have wage requirement but only 40% have wage requirement but only 20% are tied to markets20% are tied to markets

15% require health care premium 15% require health care premium contributioncontribution

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Austerity MantraAusterity Mantra

““At a time when At a time when governments must make governments must make difficult budget decisions, difficult budget decisions, spending to create jobs spending to create jobs should be transparent, fair should be transparent, fair and effective.”and effective.”

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Workforce Development Workforce Development “Integration” Issue“Integration” Issue

ED and WD should not just be “better ED and WD should not just be “better integrated”integrated”

ED should be *subordinated to* WDED should be *subordinated to* WD

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Contact Us!Contact Us!

Greg LeRoyGreg LeRoy

Executive DirectorExecutive Director

Good Jobs FirstGood Jobs First

goodjobs@goodjobsfirst.orggoodjobs@goodjobsfirst.org

www.goodjobsfirst.orgwww.goodjobsfirst.org

202-232-1616 x 211202-232-1616 x 211

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