Right at this moment, statehouse and local governments all over the country are elbowing each other like fanatic consumers at a Black Friday sale. But the prize isn’t a Tickle-Me-Elmo or the latest doll; it’s e-commerce giant Amazon and its second headquarters location.
Amazon is certainly a big fish to land. It promises to spend $5 billion on HQ2 and employ 50,000 people. Amazon has now received 238 proposals from local government units all over the United States and some of them are doozies.
Newark in debt-ridden New Jersey has statehouse backing and has offered $7 billion in incentives. Debt-ridden Illinois anted up $2.25 billion that will be worth even more if it builds on state-owned land in the Chicago area. Atlanta has offered 345 acres of land to Amazon and an offer to rename the plot Amazon, Georgia. What’s more, they would name Amazon CEO Jeff Bezos the mayor.
Tax breaks for economic development is a favorite strategy of statehouses and local governments in the effort to create jobs. But a report issued by watchdog group GoodJobsFirst.org earlier this year revealed that “only 13 of the 50 localities have an incentive program that discloses actual jobs created by subsidized companies.”
The lack of reliable information hampers the proper evaluation of the utility and efficacy of these tax breaks for economic development.
An update on the subject from Governing:
Just 35 of the 85 economic development programs identified the companies receiving incentives, while only 19 listed dollar amounts paid to or claimed by businesses.
Researchers also assessed programs’ disclosure of jobs and wage data — a crucial component in evaluating the return on investment. Only 21 of the 85 programs reported numbers of pledged jobs, while 18 disclosed actual jobs created. Even fewer local governments reported wage data for recipient companies.
Meanwhile, 27 jurisdictions — just over half of those reviewed — failed to disclose basic information about any of their incentive programs.
It is worth noting that one of the frontrunners to land the Amazon HQ2 deal is Austin, Texas. Austin was singled out in the report as the most transparent city overall. Austin was praised for its detailed database that included compliance reports and city ordinances that approved incentives.
More from Governing:
The release of the report comes at a time when governments are preparing to begin disclosing long-sought-after data around incentive programs in their annual financial reports. The Governmental Accounting Standards Board recently adopted a rule mandating reporting of aggregate economic development program costs. However, the rule doesn’t require disclosure of totals specific to individual deals or more detailed information.