Recently, the owner of the NFL's New Orleans Saints hinted that he may be interested in moving his team, perhaps to San Antonio. (Fellow San Antonio bloggers Cincinnatus and Cicero have covered this issue recently.) To sports watchers, this is part of an old story: team owner hints he may move team; city and taxpayers where team is currently located cough up huge amounts of dough to build or renovate a new stadium or otherwise provide a tremendous windfall to the aforementioned team owner. If the dough is not forthcoming, other cities fall over themselves to offer said owner the windfall he seeks; original city loses team.
The same game is played, less visibly but even more expensively to taxpayers, by other large businesses seeking government handouts. Carlos Guerra, columnist for the San Antonio Express-News, wrote yesterday about a recent case in North Carolina:
[T]wo days after the November election, [North Carolina Institute for Constitutional Law founder Robert] Orr says, the Legislature was rushed into special session and quickly approved a $240 million incentives deal for an unnamed recipient.
"When the legislation was discussed — it wasn't really debated — Dell was rumored to be the company, and 10 days later, (Dell's) CEO and the governor announced that Dell was coming," Orr says with a slight grimace. "Dell then proceeded to play off two counties against each other and received in excess of $37 million more."
The total is now almost $300 million, he says, "for the creation of some 1,600 jobs, virtually all of which will pay $28,000 or less."
Doing the math, this amounts to a subsidy of $187,500 per job! Certainly taxpayers should be able to get more for that amount of money than a low paying job. One answer to this problem, according to Robert Orr, whose organization is suing the state of North Carolina over this giveaway, is for Congress to act.
"The ideal solution is for the U.S. Congress to step up to the plate and say, 'Under the power of the commerce clause of the U.S. Constitution, we're going to legislatively prohibit states from directly subsidizing companies as an inducement to get them to move or to keep them from moving.'"
Of course, with the kings and queens of corporate handouts —the GOP, Bushies, and DeLayicans—running the show in D.C., we can't expect any help along this angle in the immediate future.
So meanwhile, an organization called Good Jobs First is working on getting localities to start requiring more from the companies that they subsidize. Benefit-less low-paying jobs will not suffice. And they apparently are having at least some success, as Carlos Guerra wrote about last week:
Reports of reversals in the Maryland Legislature that will require "big box" retailers to pay some of their "associates' " health insurance costs and of new conditions being placed on tax breaks elicited cheers at the second national Good Jobs First conference [in Baltimore].
Attending the conclave are some 400 community, labor, environmental, civil rights and tax-watch group representatives from 38 states.
Once a project of the Institute for Tax and Economic Policy, Good Jobs First has forged an unusually diverse coalition of groups into a growing national movement whose adherents research tax and economic development issues and cook up strategies to bring publicly funded incentives programs under citizen control. They also work to stop publicly funded business incentives that don't advance the public good in a demonstrable way or that shift the tax burden from big businesses to average taxpayers.
Among those presenting workshops is author Don Chen of Smart Growth America, which he says promotes "development that benefits economics, is fiscally sensible and prudent, improves the environment and makes opportunities available to more Americans."
"On many fights against (government-fueled) sprawl, we have also seen fiscal conservatives — Republicans — joining with environmentalists, social justice groups, people who care about affordable housing to advocate against sprawl development and support smart growth because they have common ground on how development occurs," Chen said.
A late 2003 survey from Good Jobs First showed that nearly 100 jurisdictions across the country "now apply job quality standards to companies that receive economic development subsidies." A very small number in an absolute sense, but the trend, at least, is good one.
“Denying taxpayer subsidies for poverty wages is truly an idea whose time has come,” said GJF Executive Director Greg LeRoy. “A decade ago, only a few jurisdictions had wage rules. Now they're becoming standard practice.”
This is an effort that clearly deserves more attention, especially here in Texas, so I am glad to see Guerra writing about it in the Express-News.
UPDATE: Added links to posts at The Jeffersonian (Cincinnatus) and San Antonio Elections 2005 (Cicero) in the opening paragraph.
Hooray for Good Jobs First! What a great idea - to provide citizen groups with key information about prospective new corporations *before* they move into town so that the citizens can influence the deals that the their cities supposedly want to construct with the corporations on their behalf. Ya gotta love it!
The Good Jobs First web site has a great link describing the most effective way to conduct research on individual corporations too!
Posted by: LoB | May 16, 2005 at 06:43 PM