This series in the New York Times over the weekend is most searing report ever on how much "doin' bidness" is costing us. From
Part I...
A Times investigation has examined and tallied thousands of local
incentives granted nationwide and has found that states, counties and
cities are giving up more than $80 billion each year to companies. The
beneficiaries come from virtually every corner of the corporate world,
encompassing oil and coal conglomerates, technology and entertainment
companies, banks and big-box retail chains.
The cost of the awards is certainly far higher. A full accounting, The
Times discovered, is not possible because the incentives are granted by
thousands of government agencies and officials, and many do not know the
value of all their awards. Nor do they know if the money was worth it
because they rarely track how many jobs are created. Even where
officials do track incentives, they acknowledge that it is impossible to
know whether the jobs would have been created without the aid.
[...]
A portrait arises of mayors and governors who are desperate to create
jobs, outmatched by multinational corporations and short on tools to
fact-check what companies tell them. Many of the officials said they
feared that companies would move jobs overseas if they did not get
subsidies in the United States.
Over the years, corporations have increasingly exploited that fear,
creating a high-stakes bazaar where they pit local officials against one
another to get the most lucrative packages. States compete with other
states, cities compete with surrounding suburbs, and even small towns
have entered the race with the goal of defeating their neighbors.
Which state pays the most incentives and has the least to show for it? Why,
Rick Perry's Texas.
Under Mr. Perry, Texas gives out more of the incentives
than any other state, around $19 billion a year, an examination by The
New York Times has found. Texas justifies its largess by pointing out
that it is home to half of all the private sector jobs created over the
last decade nationwide. As the invitation to the fund-raiser boasted:
“Texas leads the nation in job creation.”
Yet the raw numbers mask a more complicated reality behind the flood of
incentives, the examination shows, and raise questions about who
benefits more, the businesses or the people of Texas.
Along with the huge job growth, the state has the third-highest
proportion of hourly jobs paying at or below minimum wage. And despite
its low level of unemployment, Texas has the 11th-highest poverty rate
among states.
“While economic development is the mantra of most officials, there’s a
question of when does economic development end and corporate welfare
begin,” said Dale Craymer, the president of the Texas Taxpayers and
Research Association, a group supported by business that favors
incentives programs.
$19 billion annually. That is more than enough to solve the state's budget woes.
Eliminating these tax breaks would mean that the Texas legislature would not have to gut education, public health programs like Medicaid, and all the rest. All they would have to do is just ask businesses to pay what they are supposed to pay.
America -- and Texas -- is NOT going broke. We're being robbed.
Update:
This diary by Daily Kossack DRo has more.
