Unproven EV Builder Rivian Receives the Largest Auto Subsidy Package in U.S. History

May 3, 2022

Watchdog says a generation of Georgia residents will pay higher taxes and suffer under-resourced public services

Text says Rivian and it is on the side of a building.
Source: Rivian’s Facebook page


Washington D.C. — Good Jobs First Executive Director Greg LeRoy issued the following statement about a $1.5 economic development subsidy package announced this week by the State of Georgia for an unproven electric vehicle company – Rivian.

This is the largest subsidy package for an auto assembly factory in U.S. history, and it is so grossly over-priced that Georgia taxpayers will never break even on it. It will cause upward pressure on local property tax rates and may also reduce the quality of public services.

With disclosed subsidies already at $196,920 per job ­­­­— and many more still undisclosed — this deal represents a massive transfer of wealth from Georgia taxpayers to Rivian shareholders. The typical Rivian employee will never pay that much more in state and local taxes than public services they and their families will consume.

The $701.7 million property tax abatement will cause local public services to be financially stressed and put upward pressure on property tax rates when the deal causes an in-migration of workers and their families. They will need more teachers and schools, more road lanes, more water and sewer, and more public safety services.

We are also critical of the Mega Tax Credit of $196.7 million. The corporate income tax credit of $5,250 per employee per year is almost twice what a Georgia worker making $56,000 per year pays in state income taxes. So, the credit will obliterate the state fiscal benefit of Rivian paychecks for at least five years, while also very likely eliminating the company’s corporate income tax bills, if it has any.

We also note that Georgia officials have not yet disclosed any cost-benefit analysis for the Rivian deal.

Rivian may also be benefiting indirectly from the American Rescue Plan Act (ARPA), with its State and Local Fiscal Recovery Funds (SLFRF) program. The State’s announcement notes that “Additionally, GDEcD represents that the legislature, through the Amended Year 2022 Budget, has allocated $111,307,760 in funding to the Georgia Department of Community Affairs which will be used to pay for costs contemplated being funded through the JDA Grant…” That is a very large amount; many states have large surpluses now thanks to ARPA, and the Act prohibits use of the funds for tax-break giveaways.

Finally, we note that Georgia, together with Alabama, is the least transparent state in the nation in economic development, as we recently documented in our 51-state “report card” study entitled Financial Exposure.

While the state publishes some information online for companies approved for state grants, it leaves that information online for only 30 days. Georgia makes no data available to the public on job creation or investment outcomes of subsidized companies. It also does not disclose any data on the amounts of tax-based or other subsidies claimed by companies.

Good Jobs First is a non-profit, non-partisan research group on economic development incentives. Greg LeRoy is the author of The Great American Jobs Scam and No More Candy Store.