1. Exposing Wasteful Subsidies to Bolster State and Local Revenues Greg LeRoy Executive Director Good Jobs First AFSCME Convention July 15, 2014 ~ Chicago

2. Call Them What You Will “Business Incentives” (misleading) “Business Incentives” (misleading) “Corporate Welfare” (confusing) “Corporate Welfare” (confusing) “Job Subsidies” (preferred) “Job Subsidies” (preferred)

3. $70 Billion per Year! Property Tax Abatements Property Tax Abatements Tax Increment Financing (TIF) Districts Tax Increment Financing (TIF) Districts Corporate Income Tax Credits Corporate Income Tax Credits Sales Tax Exemptions Sales Tax Exemptions Tax-free Loans (“IRBs” or “IDBs”) Tax-free Loans (“IRBs” or “IDBs”) Enterprise Zones Enterprise Zones Training Grants Training Grants Land Write-downs Land Write-downs Infrastructure Aid Infrastructure Aid

4. Site Location 101

5. Site Location 101, cont. Public officials in “prisoners’ dilemma” Public officials in “prisoners’ dilemma” “Job blackmail,” “Economic war among the states” (and suburbs) “Job blackmail,” “Economic war among the states” (and suburbs) Unregulated site location consultants Unregulated site location consultants

6. Deal Flow Still Depressed 6

7. But Megadeals Are Surging

8. And So Are Their Costs

9. Problem #1 Popular Economic Miseducation

10. Problem #2 Too much retail

11. Problem #3: Fuelforsprawl

12. Problem #4: Lack of coordination with transit and training

13. Problem #5: Covertbudgeterosion

14. Problem #6: Bias against small, local entrepreneurs

15. Demand Disclosure! Annual, company-specific reporting of the deal (costs) and outcomes (benefits) Annual, company-specific reporting of the deal (costs) and outcomes (benefits) On the Web, accessible, searchable, downloadable On the Web, accessible, searchable, downloadable Time for a Report Card! Time for a Report Card!

16. Transparency = Cornerstone Job shortfalls > Clawbacks, Rescissions Job shortfalls > Clawbacks, Rescissions Poverty wages > Job quality standards Poverty wages > Job quality standards Excessive costs > Elimination, caps Excessive costs > Elimination, caps Bias against urban poor > Targeting, Cuts Bias against urban poor > Targeting, Cuts Hogged by big business > Cuts, reforms Hogged by big business > Cuts, reforms Huge $ to Wal-Mart > Site-fight tool Huge $ to Wal-Mart > Site-fight tool Subsidies to privateers > Site-fight tool Subsidies to privateers > Site-fight tool Big $ to political donors > Reforms Big $ to political donors > Reforms

17. 1995 Info- Beachhead MAPA

18. 2007

19. 2010

20. 2014

21. But…Outcomes Often Missing!

22. Subsidy Tracker First-ever searchable 50 states + DC + localities database of company- specific subsidy data

23. Subsidies, Loopholes v Pensions States’ subsidies + loopholes all exceed pension obligations: AZ, CA, CO, FL, IL, LA, MI, MO, OK, PA States’ subsidies + loopholes all exceed pension obligations: AZ, CA, CO, FL, IL, LA, MI, MO, OK, PA Offshore corporate tax dodging Offshore corporate tax dodging Delaware and Nevada loopholes Delaware and Nevada loopholes Hollywood film tax credits Hollywood film tax credits Corporate income tax credits Corporate income tax credits

24. Localities Least Transparent 2/3rds of big cities & counties fail to disclose 2/3rds of big cities & counties fail to disclose Deadbeats include Charlotte, Cook County (Illinois), Dallas, Harris County (Texas), Los Angeles (city and county), Miami-Dade County, Philadelphia, and San Francisco. Deadbeats include Charlotte, Cook County (Illinois), Dallas, Harris County (Texas), Los Angeles (city and county), Miami-Dade County, Philadelphia, and San Francisco. Memphis, New York, Austin, Chicago get top grades Memphis, New York, Austin, Chicago get top grades

25. Property Tax Abatements & TIF Schools are biggest losers

26. Striking Chicago teachers make issue of TIF; city becomes hyper- transparent

27. Chicago TIF versus Pensions TIF now diverts 10% of Chicago property tax revenue TIF now diverts 10% of Chicago property tax revenue TIF costs exceed pension obligations TIF costs exceed pension obligations Debate changes from Mayor 1 Percent’s tax hike to TIF redirected for pensions Debate changes from Mayor 1 Percent’s tax hike to TIF redirected for pensions

28. Truth in Taxation: Cook County!

29. $1B/yr in Sales Tax “Skimming” “Vendor Discount” – archaic loophole “Vendor Discount” – archaic loophole Illinois, Texas, Pennsylvania, Florida, Ohio, New York, Georgia – all lose >$50M/yr Illinois, Texas, Pennsylvania, Florida, Ohio, New York, Georgia – all lose >$50M/yr Illinois alone loses $115M/yr Illinois alone loses $115M/yr Colorado, Virginia Big-$ reforms already Colorado, Virginia Big-$ reforms already

30. Grading Places & Selling Snake Oil to the States Counter right-wing “business climate” snake oil Counter right-wing “business climate” snake oil Demolish ALEC’s Rich States, Poor States by Arthur Laffer Demolish ALEC’s Rich States, Poor States by Arthur Laffer Plus Tax Foundation, Small Business And Entrepreneurship Council, Beacon Hill Institute Plus Tax Foundation, Small Business And Entrepreneurship Council, Beacon Hill Institute

31. Fresh Fodder!

32. News Flash! Christie Spree Spawns Campaign Finance Bill! The Guardian July 11, 2014 New Jersey law would bar donations from recipients of subsidies State senators propose bill to prevent some donations following reports on subsidies awarded by Christie administration

33. Contact Greg LeRoy Good Jobs First 202-232-1616 x 211 goodjobs@goodjobsfirst.org