Good Jobs First - understanding how tax incentives are used to create jobs
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Smarter Incentives Smarter Incentives for Good Jobs for Good Jobs Greg LeRoy Greg LeRoy Executive Director, Good Jobs First Executive Director, Good Jobs First North East Regional North East Regional Employment & Training Association Employment & Training Association Webinar ~ February 6, 2014 Webinar ~ February 6, 2014 1
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What are tax incentives? How are they used to create jobs? How are they sometimes misused? All of this and more in this webinar!v See the full webinar by going to www.nereta.org and then click on the training page to purchase the webinar!
Transcript of Good Jobs First - understanding how tax incentives are used to create jobs
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
[email protected]@goodjobsfirst.org
www.goodjobsfirst.orgwww.goodjobsfirst.org
202-232-1616 x 211202-232-1616 x 211
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