Disclosure of Subsidy Deals

Public Disclosure of Economic Development Subsidy Deals

Economic development subsidies are money, tax breaks, and in-kind benefits given to companies by the government to offset the costs of opening or expanding a new facility. Subsidy decisions are often made in secret by political and corporate powerbrokers. Rarely is there public input into subsidy deals - or even knowledge of basic information like costs and benefits.

As Greg LeRoy exposes in his well-researched book, The Great American Jobs Scam, corporate subsidy deals are "a $50 billion a year scam in which – in the name of "job creation" – corporations play states and cities against each other to win hefty taxpayer subsidies that routinely exceed $100,000 per job."

The way these subsidies are implemented, monitored and enforced needs serious reform. And the most important first step is disclosure. Disclosure laws require states to compile and report information on subsidized companies, and allow public access to records such as the amount and type of subsidies companies have received, and whether companies are in compliance with their obligations under the subsidy agreement.

Click here for Summary notes of the TFOC conference call (December, 2006), including a case study of how Maine passed subsidy disclosure in 1998.

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