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!
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Good Jobs First - understanding how tax incentives are used to create jobs
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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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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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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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)
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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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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