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!

1. Smarter IncentivesSmarter Incentives
for Good Jobsfor Good Jobs
Greg LeRoyGreg LeRoy
Executive Director, Good Jobs FirstExecutive Director, Good Jobs First
North East RegionalNorth East Regional
Employment & Training AssociationEmployment & Training Association
Webinar ~ February 6, 2014Webinar ~ February 6, 2014
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2. Good Jobs First:Good Jobs First:
A Resource for State and LocalA 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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3. ~$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 CreditsCorporate Income Tax Credits
 Sales Tax ExemptionsSales Tax Exemptions
 Enterprise ZonesEnterprise Zones
 Land Write-downsLand Write-downs
 Infrastructure AidInfrastructure Aid
 Personal Income Tax DiversionsPersonal Income Tax Diversions

4. Site Location 101Site Location 101
 Business basics matter most (not taxBusiness basics matter most (not tax
breaks)breaks)
 Public officials in “prisoners’ dilemma”Public officials in “prisoners’ dilemma”
 ““Job blackmail,” “Economic war among theJob blackmail,” “Economic war among the
states”states”
 Unregulated site location consultantsUnregulated site location consultants
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5. Transparency = CornerstoneTransparency = Cornerstone
 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 ReformSubsidies to privateers > Contract Reform
 Big $ to political donors > ReformsBig $ to political donors > Reforms
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6. 20072007
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7. 20102010
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8. 20132013
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9. Show Us the Subsidized JobsShow Us the Subsidized Jobs
 55% of major state ED programs name55% of major state ED programs name
recipient, value of subsidyrecipient, 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 passingIL, 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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10. States with (at Least Some)States with (at Least Some)
Exemplary Tax-CreditExemplary Tax-Credit
DisclosureDisclosure
 IllinoisIllinois
 IowaIowa
 North CarolinaNorth Carolina
 MassachusettsMassachusetts
 MissouriMissouri
 Rhode IslandRhode Island
 Washington (sometimes…)Washington (sometimes…)
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11. IllinoisIllinois
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12. North CarolinaNorth Carolina
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13. IowaIowa
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14. MassachusettsMassachusetts
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15. Show Us the Local SubsidiesShow Us the Local Subsidies
 2/3rds of big cities & counties fail to2/3rds of big cities & counties fail to
disclosedisclose
 Deadbeats include Charlotte, CookDeadbeats include Charlotte, Cook
County (Illinois), Dallas, Harris CountyCounty (Illinois), Dallas, Harris County
(Texas), Los Angeles (city and county),(Texas), Los Angeles (city and county),
Miami-Dade County, Philadelphia, andMiami-Dade County, Philadelphia, and
San Francisco.San Francisco.
 Memphis, New York, Austin, Chicago getMemphis, New York, Austin, Chicago get
top gradestop grades

16. Subsidy TrackerSubsidy Tracker
First-ever searchable 50 states +First-ever searchable 50 states +
DC + localities database ofDC + localities database of
company-specific subsidy datacompany-specific subsidy data
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17. Subsidy Snapshots in NYCSubsidy Snapshots in NYC
 Visible atVisible at www.goodjobsny.orgwww.goodjobsny.org underunder
“Resources and Tools”“Resources and Tools”
 Map deals by Community Board Areas inMap deals by Community Board Areas in
each borougheach borough
 Released with borough presidentsReleased with borough presidents
 Offered to training providersOffered to training providers
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18. Detroit MSA Shutdowns 2001-04Detroit MSA Shutdowns 2001-04

19. MEGA Deals 2001-2004MEGA Deals 2001-2004

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

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

22. Solution: Align DevelopmentSolution: Align Development
Subsidies with Transit RoutesSubsidies with Transit Routes
 Make workplace access via transit anMake workplace access via transit an
eligibility requirement (or at least aneligibility requirement (or at least an
application-rating preference) for anapplication-rating preference) for an
incentiveincentive
 California, Maryland, Illinois, New JerseyCalifornia, Maryland, Illinois, New Jersey
have made small stepshave made small steps

23. 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 Mobility,Job blackmail (Sears, Motorola Mobility,
CME and ADM in Illinois alone) (NJ,CME and ADM in Illinois alone) (NJ,
OH…)OH…)
 Active-pirate states (Texas, Florida, NewActive-pirate states (Texas, Florida, New
Hampshire, Rhode Island, Tennessee)Hampshire, Rhode Island, Tennessee)

24. Solution:Solution:
De-monetizeDe-monetize
Interstate JobInterstate Job
FraudFraud

25. Fresh Fodder!Fresh Fodder!

26. Boeing Exemplifies Trend:Boeing Exemplifies Trend:
Stakes Are Higher Than EverStakes Are Higher Than Ever
 Deal flow is depressedDeal flow is depressed
 ““Megadeals” are up in number and costMegadeals” are up in number and cost
 So accountability really mattersSo accountability really matters
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27. Deal Flow is DepressedDeal Flow is Depressed
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28. But Megadeals Are SurgingBut Megadeals Are Surging
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29. MegadealsMegadeals
 240 deals @ $75 million to $5.6 billion240 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 nowNew York and Michigan (and now
Washington is #1) = top spendersWashington is #1) = top spenders
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30. And So Are Their CostsAnd So Are Their Costs
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31. Paying TaxesPaying Taxes
to the Bossto the Boss
 16 states allow companies to16 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

32. Job-Creation &Job-Creation &
Job-Quality StandardsJob-Quality Standards
 Money for SomethingMoney 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 20%40% have wage requirement but only 20%
are tied to marketsare tied to markets
 15% require health care premium15% require health care premium
contributioncontribution
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33. Austerity MantraAusterity Mantra
““At a time when governmentsAt a time when governments
must make difficult budgetmust make difficult budget
decisions, spending to createdecisions, spending to create
jobs should be transparent, fairjobs should be transparent, fair
and effective.”and effective.”
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34. Workforce DevelopmentWorkforce Development
“Integration” Issue“Integration” Issue
 ED and WD should not just be “betterED and WD should not just be “better
integrated”integrated”
 ED should be *subordinated to* WDED should be *subordinated to* WD
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35. 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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