August 2014 Posts
Early this week Good Jobs First joined its voice with those of progressive organizations in Arizona, California, New Mexico, Nevada and Texas to express concerns about the pending subsidy bidding war over Tesla’s proposed Gigafactory. In case you missed it, an open letter signed by Arizona PIRG, the California Budget Project, Progressive Leadership Alliance of Nevada (PLAN), New Mexico’s SouthWest Organizing Project, Texans for Public Justice and Good Jobs First regarding the multi-state competition has been generating growing media attention. The letter calls for state leaders to seize the opportunity presented by Tesla’s subsidy demands, communicate with each other, and reject the harmful Race to the Bottom.
Much of our daily work at Good Jobs First consists of monitoring massive subsidy packages that often don’t receive much attention in the media. But events like the Gigafactory bidding war provide an opportunity to break down these complicated issues into smaller pieces that allow a practical public dialogue about job creation, competition, and fairness.
[caption id="attachment_3796" align="alignright" width="256"] North Carolina State Capitol. Image by Abbylabar (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons[/caption]
For the past decade, North Carolina has spent heavily on subsidies, abandoning its previous economic stinginess. In an encouraging new reversal, the Tar Heel State is returning to its old ways. In a just completed short session, the state legislature took two important steps to limit giveaways: it ended one of the country's biggest film tax credit programs and it defeated a proposal by Gov. Pat McCrory and Secretary of Commerce Sharon Decker to create a deal-closing slush fund. The defeat of the fund also meant the rejection of an expansion of several existing subsidy programs and a special deal for a paper mill.
Not everything coming out of the session was positive. Lawmakers moved ahead with an ill-conceived plan to privatize job recruitment functions of the state's Commerce Department. The plan was approved despite warnings of problems with similar quasi-public agencies across the country and despite revelations by the N.C. Policy Watch that the Partnership’s CEO lacks experience in economic development and led his company into bankruptcy.
It was the second attempt by the Governor and Commerce Secretary to pass this bill. During the previous legislative session, a similar proposal failed when an amendment that would lift the state moratorium on hydraulic fracturing was added to the bill (the North Carolina chapter in our Creating Scandals Instead of Jobs study has more details on that plan).
For Immediate Release August 25, 2014
California traditionally avoided the lavish subsidy packages that other states offer to large corporations to attract investment. In the Good Jobs First Megadeals report last year, there were only two California entries, and they both involved local rather than state money.