Labor & Employment Law

New Tools Bring State Corporate Tax Breaks to Light

By James Parks

Each year, state and local governments give out billions in tax breaks and subsidies to corporations in return for a promise that the company will create new jobs. While most states disclose the names of companies receiving state and local tax breaks, cash grants and other subsidies for job creation, the quality of the reporting varies widely. In fact, about a dozen states are still keeping taxpayers in the dark, according to a new report.

The report, ?Show Us the Subsidies,? by Good Jobs First, a nonprofit, non-partisan research center, shows that Illinois, Wisconsin, North Carolina and Ohio were found to have the best economic development disclosure.

?With state legislators making painful political budget decisions, corporate tax breaks should be completely visible so spending for economic development should be transparent,? says Greg LeRoy, executive director of Good Jobs First.

Tax breaks dominate state development, but these breaks usually are not visible, not widely publicized and often get bypassed when cuts are made. As a result, the really important things like training and education get cut and the tax breaks are untouched. When budgets get cut, everything, including tax breaks, should be on the table.     

Good Jobs First also released two new online tools to help taxpayers keep up with state government economic development practices: Subsidy Tracker, a searchable database that combines subsidy information from numerous state governments; and Accountable USA, a set of webpages on each of the 50 states and the District of Columbia that summarize their track records on subsidies. (See the Good Jobs First website at www.GoodJobsFirst.org.)

“The outpouring of job-subsidy data is a breakthrough for state government transparency and accountability,” says Philip Mattera, Good Jobs First?s research director and principal author of  “Show Us the Subsidies.”

Enhanced disclosure makes it much easier to monitor the tens of billions of dollars in taxpayer revenues that are being diverted to private parties each year.

“Show Us the Subsidies” rates the reporting practices of 245 key economic development subsidy programs around the country and includes detailed information about the subsidies.

Full post as published by AFL-CIO NOW BLOG on December 13, 2010 (boomark / email).