New Model Legislation from Good Jobs First
Washington, DC, October 10, 2012 -- Good Jobs First today released an updated version of its model state legislation to make economic development subsidy programs more accountable and effective. It can be found at: http://www.goodjobsfirst.org/accountable-development/model-legislation
"This model legislation is informed by our many years of grading the states on their economic development program rules," said Good Jobs First executive director Greg LeRoy. "At a time when states must make painful budget decisions, taxpayer subsidies in the name of jobs should be transparent, fair and effective."
"Our model language is derived from the best state and local laws Good Jobs First has found while issuing six 50-state "report card" studies, including Show Us the Subsidies, Money for Something and Money-Back Guarantees for Taxpayers," said Good Jobs First research director Phil Mattera. "These are proven, common-sense safeguards that every state should consider as a baseline."
The legislation is designed to apply to every major kind of economic development subsidy that a state legally enables and which in turn is administered by either the state or by local governments. They include: corporate income tax credits (for job creation or retention, research and development, film production, etc.); property tax abatements and reductions; enterprise zones; tax increment financing districts; training grants; loans and loan guarantees; sales tax exemptions and rebates, and others.
The model legislation has four parts:
Disclosure: company-specific annual reporting on the Web of the costs and benefits of every deal, including Unified Reporting of Property Tax Abatements and Reductions to disclose online when local property taxes are lost that would otherwise fund schools and other local services;
Job Creation and Job Quality Standards: to make sure the cost per job is not excessive and that public subsidies help to raise living standards, not lower them;
Clawbacks and Rescissions: to ensure that deals are carefully monitored and that companies pay subsidies back (or lose future subsidies) if they fail to deliver on jobs or other community benefits;
Unified Economic Development Budget: to provide state legislators with a full annual accounting of every kind of expenditure the state makes for jobs to make sure that any budget cuts are fairly applied to less-visible corporate tax breaks, not just appropriations such as grants or loans.
Good Jobs First www.goodjobsfirst.org is a non-profit, non-partisan resource center promoting best practices in state and local economic development and smart growth for working families. Based in Washington, DC, it includes Good Jobs New York www.goodjobsny.org.