State and local officials often try to attract companies to rural places as an engine for economic growth, but an investigation by The New York Times has found that these officials often spend more to get companies to relocate than their community or town gets in return. The investigation concluded that state, counties and cities spend more than $80 billion every year in incentives to companies, which range from oil and coal companies to banks and big-box retailers, Louise Story reports.
Story discovered that it's not possible to get a full account of incentive awards "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," she writes. "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."
According to the investigation, Texas awards more than $19 billion a year in incentives, more than any other state. Alaska, West Virginia and Nebraska award the most per resident. For many communities and states, which are mostly rural, the awards are a large portion of their overall spending. Oklahoma and West Virginia give amounts that are equal to one-third of their budgets, and Maine give about a fifth of its total budget. The most incentive money is spent on manufacturing, followed by agriculture and oil, gas and mining. The film industry comes in fourth, with technology not far behind. (Read more)
The Times investigated more than 150,000 incentive awards and created a searchable database, which can be accessed here.
Story discovered that it's not possible to get a full account of incentive awards "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," she writes. "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."
According to the investigation, Texas awards more than $19 billion a year in incentives, more than any other state. Alaska, West Virginia and Nebraska award the most per resident. For many communities and states, which are mostly rural, the awards are a large portion of their overall spending. Oklahoma and West Virginia give amounts that are equal to one-third of their budgets, and Maine give about a fifth of its total budget. The most incentive money is spent on manufacturing, followed by agriculture and oil, gas and mining. The film industry comes in fourth, with technology not far behind. (Read more)
The Times investigated more than 150,000 incentive awards and created a searchable database, which can be accessed here.
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