Corporate Subsidies—The Good, the Bad, and the Ugly

June 8, 2022

Corporate Subsidies—The Good, the Bad, and the Ugly

Credit:Nonprofit Quarterly

Good Jobs First Senior Research Analyst Kasia Tarczynska wrote about why the lack of information in deals involving economic development subsidies is so problematic:

“Every day it seems, local and state officials hold a press conference to announce that a company is bringing a project to their community. Those ceremonies tout the alleged benefits of the company’s arrival: the number of jobs that will be created and the amount of money a company will invest. But what is too often missing from those announcements are the costs: how much money will the public have to pay the company in return?

Without that vital piece of information, the rest of the discussion is just noise, for there is no way of knowing whether the per-job cost is a good investment for the community—or a lousy one.

States and localities across the country give companies corporate tax breaks, or “incentives” as corporations and some elected officials like to call them. These tax breaks allow companies to pay little to nothing in state income, property, or sales taxes. States also woo companies using non-tax subsidies, like cash grants, workforce training, or free land, roads, and sewer lines.

In short, corporations are exempted from paying for all the things that communities value: clean water, paved roads, well-maintained parks, public safety, help for people in medical distress.”

Read the full piece at Nonprofit Quarterly.