Good Jobs First provided an update on its online database Subsidy Tracker 2.0 and discussed the importance of transparency for economic development incentives during an informative webinar earlier this week.
Subsidy Tracker 2.0
Subsidy Tracker 2.0 is a free, searchable, online database of incentive recipients and awards in the US. It covers over 500 incentive programs in all 50 states plus the District of Columbia. It currently contains data on more than 258,000 awards since the 1970s, though most entries are from more recent years. Many local incentives are also included, a rarity in incentive analyses. I am not aware of any other data set that comes close to this level of coverage.
One of the newest – and most valuable - elements of Subsidy Tracker 2.0 is the ability to identify parent companies of many of the firms receiving incentives. Good Jobs First’s painstaking collection of this data has revealed an important point: an estimated 965 parent companies account for about 75% of the value of all incentives. The top 100 parents have accounted for roughly 50% of the total value. This tool lets economic developers and others see the history of incentive use among incentive applicants and their parent companies, a useful step in performing due diligence.
The search form is extremely easy to use and allows you to sort by several fields, including state, city or county; company; award value; type of award; and year.
One of my favorite aspects is that each award in the database includes a link with the original source of data, useful both for verification and to examine details that are not included in the online database.
While I am clearly a big fan of the database, it is important to be careful in interpreting the output. This is true for any data or report on incentive use. One issue to be mindful of is that much of the data is based on announcements, not actual spending or outcomes. Research Director Philip Mattera explained that where state and local governments make data available on actual outcomes, those numbers are included in the database, but few places consistently release this information. We at Smart Incentives know this to be true and continue to work to improve monitoring and reporting on both compliance and economic outcomes.
Timing is another challenging issue. For example, Boeing tops the list of incentive recipients in part because of the announced $8.7b dollar package from Washington state in 2013. However, we know that package is stretched out through 2040 and contains several tax breaks that will (or will not) occur over this period time. It wasn’t $8.7 billion cash upfront in 2013. Again, this is not a criticism of the database – it is very valuable to know the scale and the scope of the announcement – but from an economic development perspective, it is just as valuable to understand the details behind the announcement. Subsidy Tracker provides a great starting point for further analysis.
Executive Director Greg LeRoy addressed transparency as a means to improve accountability in the use of economic development incentives. He noted that states have made great progress in reporting on incentive use, with 55% of major state programs now releasing award value and recipient names. However, local reporting remains “primitive,” with two-thirds of big cities and counties failing to disclose incentive data. Both state and local governments fall short on reporting – and in some cases requiring – specific outcomes.
He also identified four policy issues that should be addressed:
- Comparing press releases to actual job outcomes
- Over-subsidization of retail
- Intra-regional job piracy
- Big-small company comparisons
We agree that these are important topics for economic developers to analyze and consider in their incentive programs and policies.
Good Jobs First “is a national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development and smart growth for working families.” Recent publications include: Show Us the Subsidized Jobs; Megadeals; and Show Us the Local Subsidies.