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Saturday, May 21, 2022

Join our Team, Help Change the World

 Today I have a guest post from my colleague Arlene Martinez, Deputy Executive Director and Communications Director of Good Jobs First.


Arlene here, with the latest dispatch from my favorite workplace (and it could be yours too —we’re hiring!).

But first, our Executive Director Greg LeRoy testified, along with Amazon Labor Union President Christian Smalls and Teamsters General President Sean O’Brien, during a Senate Budget Committee Chair hearing on whether companies that violate labor laws should be debarred from federal contracts.

Here’s what LeRoy said in part:

“When a company violates workers’ rights to freely organize a union, that contradicts a fundamental idea within economic development and public procurement: that public dollars should always serve to raise living standards and reduce inequality, and they should never be used to suppress wages and benefits and exacerbate inequality. Otherwise, why should we collectively favor a company with subsidies or contracts? Why should we pay a company to make inequality worse?”

Read his full testimony. Here’s the Reuters story on the hearing.

Seeking Project Coordinator to Lead our Work on “Defending the Public Against Corporate Tax Breaks”

Good Jobs First is hiring a Project Coordinator responsible for a project that uses a database, reports and technical assistance to document how much revenue government bodies are losing to corporate tax breaks.  

The project, Defending the Public Good against Corporate Tax Breaks, is powered by a recent change in government-accounting rules. For the first time ever, most local and state governments, including school districts, must now report each year how much revenue they lose to corporate tax breaks granted in the name of economic development.

Analysis of the data has confirmed that in some communities, schools in poor areas lose the most revenue to economic development subsidies, and those student populations are often Black and brown. In other places, our analyses have found growth being subsidized in affluent areas, meaning limited public dollars are being wasted to fuel development that would have taken place even without the subsidies.

If you love data, like to see it put into action, and believe good public education should be available to every student no matter where they live, this role might be perfect for you.

Find all the details, including how to apply, here.

The Trouble With South Carolina

South Carolina’s public schools reported $534 million in revenues lost to corporate tax abatements in FY 2021, an increase of 65% compared to just four years earlier.

In fact, in the five years such reporting has been required, South Carolina schools have lost a total of $2.2 billion.

That’s real money — and real implications for students every day.  We talked about the problem, along with solutions (let school boards have a say when counties try to give away education funding!).

Watch the discussion on Facebook, YouTube, or Twitter. And in case you missed the report, check it out here.

Want to stay involved in efforts to get some transparency in South Carolina? Sign up here and we’ll keep you posted.

EV Manufacturers: Don’t be Like Tesla

Who are Canoo, Fisker, Rivian and Lucid? We’ve been frequently contacted lately as unproven electric vehicle companies shake down communities for billions of dollars in subsidies.  

The biggest so far is Rivian, the Amazon-backed company that got a package worth $1.5 billion (and counting) in Georgia. At a per-job cost of $200,000, there’s no way the state can ever break even, LeRoy told the Associated Press: “There’s no way that the average worker in this place is going to pay $200,000 more in state and local taxes [than public services they and their families consume].” (Rivian shares spiked at $179 last fall when it went public and are down 84% since.)

But Madeline Janis, a Forbes contributor and executive director of the nonprofit Jobs to Move America (and Good Jobs First board member), says the EV companies can use the public support for good. Up-and-coming companies needn’t act like Tesla, a workplace rife with allegations of racism and otherwise running afoul of labor laws. They can set the tone for a new type of good job, she writes.

“Companies like Tesla that represent the future shouldn’t be stuck in the past with hostile, dangerous working conditions at their manufacturing plants. Instead, taxpayers should be rewarding companies that use our tax dollars to create good jobs and training programs that create a pipeline of skilled workers, which in turn improves the lives of these workers and their communities.”

Read the full column at Forbes.

And ICYMI: LeRoy wrote about the right way to do EV incentives for Nonprofit Quarterly. States and localities can, by not centering corporate interests, play a significant role in advancing a green economy with equity.

Before I go, one last thing: Good Jobs First is part of a coalition working to end the use of non-disclosure agreements (NDAs), those things that let companies shake down communities for ever-higher economic development subsidies completely in secret. Learn more about our effort at

Know of a project using an NDA in your area? We'd love to hear about it.

Until next time.


Thursday, May 19, 2022

New Study Shows South Carolina Schools are the "Biggest Losers" to Tax Incentive

 A major new study by my colleagues at Good Jobs First found that of any state in the Union, South Carolina schools lose the most to tax incentives. The total in fiscal year (FY) 2021 came to $534 million, 65% more than the first year school districts were required to report their losses to other governments' tax abatements (FY 2017). In South Carolina's case, it is counties which decide on tax incentives and school districts have no say-so, even though property tax abatements usually cost the schools five or six times as much money as they do the counties.

Five or six times as much! Not only did you read that right, but it is actually typical in most states that a municipal government can harvest tax revenues from other taxing jurisdictions.

This study and its predecessors was made possible by the 2015 introduction by the Governmental Accounting Standards Board (GASB) of Statement #77, which requires that governments that passively lose tax revenue to other districts must report those losses, in addition to being reported by the government that actively creates the tax incentives. With five years of reports now in the books, this has created a treasure trove of data.

Over those five years, school districts in South Carolina have lost a total of $2.2 billion.

The biggest loser in the state was Berkeley County school district, which lost $84 million in FY 2021, third highest in the nation. Only the Hillsborough 1j district in Oregon and Philadelphia City Schools lost more than that. South Carolina's biggest losers had higher than average poverty rates, in a state with above-average poverty.

By contrast, 2% raises for every teacher in the Berkeley County district would cost $4.5 million, according to the report.

What can be done? The report recommends safeguarding school districts from tax abatements, mandating advanced disclosure of proposed tax incentives to enable public discussion, requiring counties to make company-specific disclosure to make proper evaluation of such deals, and performing audits of each tax break program to ensure it is working as intended.

Such reforms are only common sense, but lack of transparency hampers discussion of subsidies in many areas of the country. The introduction of GASB Statement #77 is helping bring that transparency to debates on tax incentives.

Friday, November 26, 2021

New "Taxcast" focuses on Tax Haven Ireland

 The newest edition of The Taxcast just dropped, and it's (almost) all about one of my favorite countries, Ireland. You remember Ireland, that proud adopter of the euro that was forced to undergo terrible austerity policies during the Great Recession because it couldn't devalue. It suffered six years of net emigration, literally exporting its unemployment elsewhere and making its unemployment rate look smaller than it would have otherwise. Meanwhile, currency-devaluing, banker-jailing Iceland ran rings around Ireland's performance on employment.

This month's Taxcast interviews the authors of a new book, Tax Haven Ireland, Kieran Allen (University College Dublin) and Brian O Boyle (St. Angela's College). They show how establishing Ireland as a tax haven, including through the creation of the International Financial Services Centre, has undermined democracy and public services in the Republic. Allen and O Boyle discuss how Ireland's niche with U.S. multinationals has changed somewhat in recent years, with a shift away from manufacturing toward services to tech giants like Amazon and, of course, Apple. As they point out, one of the new ways of being relevant to the tech firms was to host data centers, despite the fact that these operations typically consume gigantic amounts of electricity while creating jobs numbering in the dozens. Meanwhile, the country is looking at power blackouts this winter. This is just one of the many contradictions of the Irish economic strategy Allen and O Boyle illustrate.

The Taxcast also reports on Tax Justice Network's new "State of Tax Justice" report, which estimates that tax havens are costing nations globally a minimum of $483 billion in tax revenue annually. That is three times the cost of fully vaccinating everyone against Covid. It also discusses how the rich-state members of the Organization for Economic Cooperation and Development (OECD) are responsible for 3/4 of these tax losses, so it might make more sense to move tax haven work away from the OECD and into the United Nations.

If you prefer reading to listening, you can find the transcript here.

Monday, October 25, 2021

New research tool puts spotlight on company law-breaking in the UK

My colleagues at Good Jobs First have created a new database to track company regulatory violations in the United Kingdom. Violation Tracker UK joins the domestic US Violation Tracker as a way for a variety of users to track down information on corporate misdeeds dating back to 2010 in most cases.

“We hope that Violation Tracker UK will, like its U.S. counterpart, be helpful to a wide range of users, especially those seeking to reform corporate behavior,” said Good Jobs First Research Director Philip Mattera, who leads the work on the database.

The free tool allows users to search by company (with parents matched to subsidiaries), headquarters nation, type of offense, amount of fines, regulatory agency involved, etc. It lets researchers get a rapid overview of the determinations of over 40 agencies.

Some highlights: The largest amount of fines, £4.5 billion, has been levied in the financial service industry. Aerospace firms (mainly Airbus) accounted for £1.6 billion in penalties and telecommunications (primarily the now-defunct Nortel) came in at £1.2 billion.

Competition related violations account for £5.2 billion in fines, and £2.8 billion have been assessed for financial offenses. Good Jobs First points out that due to heavy use of warnings rather than financial penalties, health (£413 million) and environmental (£312 million) violations have been much less heavily penalized. 

UK readers in particular, check out Violation Tracker UK! Its predecessors, Subsidy Tracker and Violation Tracker, have been used in the statistical analyses of more than 40 academic papers or Ph.D. dissertations worldwide. You will find high-quality data at your fingertips, and a way to help keep track of corporate scofflaws.

Wednesday, October 6, 2021

Ford Announces Giant Electric Vehicle Plant in Western Tennessee

 On September 27, Ford Motor Company announced plans to invest $5.6 billion at the Memphis Regional Megasite in Stanton, Tennessee, to build an electric vehicle (EV) assembly and battery plant, jointly with SK Innovation. The facility, dubbed “Blue Oval City” by Ford (in a reference to its corporate logo), is projected to employ 5,800 people as Ford makes its first big foray into EV production. The same week, Ford and SK Innovation revealed plans for two more battery plants in Glendale, Kentucky, south of Louisville, at an estimated cost of $5.8 billion.

Together with all the other recently announced investments in EV manufacturing, Ford’s new project highlights the commercial success of electric vehicles. But if you’re like me, you want to know about the subsidies it received. Glad you asked!

The short answer is that we have only partial information so far. As with the Nissan plant in Canton, Mississippi, or the deal made by Memphis for Electrolux in 2011, there will doubtless be multiple subsidies whose details will come out long after the initial announcements. That said, what we know already is ominous.

First, the state of Tennessee has pledged over $500 million to be given as a grant to the two companies; it will be voted on in a special legislative session in the near future.

From there, adding up the incentives becomes more difficult. The Memphis Regional Megasite is a subsidy in itself: 3,600 acres (about 5.6 square miles) with dedicated infrastructure. Tennessee Governor Bill Lee (R) said that over $200 million has already been invested in the Megasite.

The biggest incentive is likely to be electricity discounts: Blue Oval City will get power from the federally owned Tennessee Valley Authority (TVA). Electric vehicle and battery manufacturing are energy-intensive, and large rate discounts over the life of the facilities will add up. Hundreds of millions of dollars is a certainty, and it is easy to imagine the electricity subsidy alone totaling billions. Don’t believe me? Check out the Alcoa Aluminum plant in Massena, New York, where hydro-power discounts are saving the company $5.6 billion over 30 years, now the largest subsidy ever given in the United States for a single project (with Boeing’s $8.7 billion Washington State deal withdrawn in a WTO settlement).

The state will also establish a satellite campus of the Tennessee College of Applied Technology (TCAT) at the location, part of an $80 million investment into the TCAT system.

Finally, there is no information available yet on local subsidies. Property tax breaks (called PILOTs in Tennessee when a public entity technically retains ownership of the project) and sales tax exemptions are likely to add many millions more to the incentive package.

What is the final number likely to be? My guess is over a billion dollars, but the question is how much over. We’ll see, eventually. If we’re lucky.


Cross-posted with Good Jobs First.

Thanks to my colleagues Greg LeRoy and Kasia Tarczynska for helpful editorial suggestions.