Economic development incentives cost states and localities up to $90 billion a year, often starving education and social services for resources in the process. Gradually, albeit far too slowly, the field is coming to recognize the folly of developing the local economy by throwing tax dollars at corporations.
The next mayor of Kansas City is facing a potential sea change in the way the municipality looks at tax incentives for large property development.
Nashville’s Metro Council agrees to pay Amazon $500 per job in Nashville per year for seven years. But many councilmembers call for an overhaul of the entire corporate tax abatement process.
Despite considerable public dissent, the Arlington County Board agreed to reduce Amazon’s tax burden by $23 million over the next 15 years. This is on top of $750 million already pledged to Amazon by Virginia’s state government.
By putting inclusivity at the forefront of discussions, and by ensuring that oft-unheard voices are heard, nonprofits can fully embrace and fulfill their charge as key stewards of an emerging inclusive economic development philosophy that values everyone.
A study of a Texas economic development incentive program finds that one in four companies renegotiate—typically in secret—the tax abatement dollars deals that they receive.
For New Yorkers, Amazon’s union-busting is a deal breaker.
On the same day Amazon decided to abandon its plans to establish a secondary headquarters in New York City, leaving behind $3 billion in publicly funded incentives, GE announced it would repay the city of Boston for almost $90 million in development incentives.
If a state gave grants to nonprofits but kept organization names, award amounts, and fund uses secret, it would be a scandal. But with corporations that receive state tax credits, this is business as usual. Some folks in Tennessee’s legislature, however, want this to change.
In East Baton Rouge, a local school board facing a shortage of funds to pay teachers opts out of a tax-abatement deal for ExxonMobil that would have cost local school coffers $2.9 million over 10 years.
