Arizona’s Corporate Welfare Queensby Art Jacobson on Dec. 03, 2012, under Business Incentives, Capitalism, Corporate Tax Benefits, Corporate Welfare Queens, Development Tax Policies, Politics
Bellying up to the public trough is not limited to the undeserving poor; the undeserving rich do it, too. As a matter of fact it has become standard operating procedure for American businesses over the past 25 years.
What we’re talking about here is a kind of corporate blackmail called “business incentives.” Pay up or we won’t move our business to your town or your state. Pay up or we’ll move out of town. Give us tax credits. Pay to train our employees. Build us sone roads or other infrastructure. Or else.
This is always presented as “win-win” or “one hand washing the other.” What it costs the public treasury, it’s argued, will be more than made up for (over time) by an increase in the vitality of your economy and the subsequent tax revenue.
The problem with this is that it is almost impossible to determine if more than one hand actually ever gets washed, or whether a lasting relationship is established with the host community. A series running in the New York Times spells out in detail just how costly these business incentives really are and how deceptive they can be.
“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 Times analyzed more than 150,000 awards and created a searchable database of incentive spending. The survey was supplemented by interviews with more than 100 officials in government and business organizations as well as corporate executives and consultants.
That data base should be of special interest to us here in Arizona since it lets us see just what these incentives cost us.
We spend at least $1.47 billion per year on incentive programs; roughly 230 dollars per capita or 16 cents per dollar of state budget.
To read how many incentives are doled out, and who gets them, visit the searchable data base for Arizona, here.
The NY Times series starts here.