{"id":158,"date":"2019-03-07T17:26:46","date_gmt":"2019-03-07T17:26:46","guid":{"rendered":"http:\/\/www.dcfeedback.com\/archives\/?p=158"},"modified":"2019-03-07T20:48:05","modified_gmt":"2019-03-07T20:48:05","slug":"corporations-often-secretly-renegotiate-their-tax-incentives-study-finds-next-city","status":"publish","type":"post","link":"http:\/\/www.dcfeedback.com\/archives\/158\/","title":{"rendered":"Corporations Often Secretly Renegotiate Their Tax Incentives, Study Finds \u2013 Next City"},"content":{"rendered":"

nextcity.org\/daily\/entry\/corporations-often-secretly-renegotiate-their-tax-incentives-study-finds?utm_source=Next+City+Newsletter&utm_campaign=506fa647c4-Daily_781_COPY_01&utm_medium=email&utm_term…<\/a>
\nCorporations Often Secretly Renegotiate Their Tax Incentives, Study Finds Tax breaks to corporations in exchange for jobs are often modified\u2014in secret\u2014after the fact, a new study finds.
\nGoverning magazine reports that the University of Texas at Austin studied 165 awards given out by the Texas Enterprise Fund, which manages such corporate incentives for the state. In 46 of those cases \u2014 about a quarter \u2014 the fund changed contracts after they had been finalized. In most cases, the changes were favorable to the company, lowering the number of jobs required to get the tax breaks, or changing the schedule for meeting those requirements. And many times, Governing says, the changes happened right before a company would be subject to provisions requiring it to pay back the incentives it received for not creating those jobs.
\nThere might be more amended deals than included in the study, as many companies challenged UT Austin\u2019s public-records requests during its research. \u201cThis finding, from a single state, is troubling,\u201d Nathan Jensen, the study\u2019s co-author, told Governing. \u201cIf companies can not only secretly renegotiate the rules, they can also make sure that public records laws shield them from revealing these renegotiations.\u201d
\nThe study authors ultimately got a list of the names of companies that had amendments to their contracts. They also obtained full contracts for 63 companies, and they\u2019re waiting for the rest of the records, including for 42 companies that submitted formal legal challenges to their records request.
\nIn one example of contract renegotiation, Comerica received $3.5 million in tax breaks in 2007 to relocate from Detroit to Dallas and create 200 jobs paying an average wage target. Five years later, the contract was amended to allow Comerica to include 15 of its existing executives, including the CEO, toward its job and wage target.
\nIn another example, SpaceX received $2.3 million to create 300 jobs at a new facility in Texas. In 2017, the company renegotiated the deal to create 150 jobs in exchange for $1.15 million. However, no jobs have actually been created yet and no funds have been paid out.
\nThe authors also found that companies that had renegotiated their contracts were almost twice as likely to have challenged the authors\u2019 records requests.
\n\u201cThis pattern is consistent with companies using public records laws to hide their non-compliance with their job creation promises,\u201d they wrote for The Conversation.
\nThe study only looked at Texas incentives, but the problem doesn\u2019t seem to be confined to Texas.
\nA 2017 audit of New Jersey\u2019s Economic Development Authority (which has a new focus on existing small businesses in the state) found \u201clax oversight\u201d of the tax breaks it issued, finding four of seven businesses studied hadn\u2019t created the jobs they promised, but still received their full awards. A more recent audit said that it couldn\u2019t actually find 2,993 jobs that had been reported as being created or retained.
\nIn New York, a 2016 audit of the state\u2019s Excelsior Jobs Program found that staff \u201cregularly lowered the number of jobs required in contracts when companies were about to fall short of meeting those targets,\u201d Governing wrote.
\nIncentives just might not do that much at all. As Next City has reported, in a study published last year, Mary Donegan, T. William Lester and Nichola Lowe found that companies that receive tax incentives don\u2019t seem to create more jobs than the companies that don\u2019t.
\nThe findings have implications for high-profile incentive deals such as the Amazon HQ2 search. In Northern Virginia, Arlington County proposed giving Amazon $23 million in incentives, in addition to the $750-million package approved by the state. For Arlington\u2019s $23 million to kick in, it must fill a certain amount of office space. Activists argued that they had wanted the company to pay union-level construction wages, donate to affordable housing funds and end its partnership with ICE, and instead the proposed deal amounts to the company \u201cjust show[ing] up.\u201d<\/p>\n

Mary Bolton 202-390-1208<\/p>\n","protected":false},"excerpt":{"rendered":"

nextcity.org\/daily\/entry\/corporations-often-secretly-renegotiate-their-tax-incentives-study-finds?utm_source=Next+City+Newsletter&utm_campaign=506fa647c4-Daily_781_COPY_01&utm_medium=email&utm_term… Corporations Often Secretly Renegotiate Their Tax Incentives, Study Finds Tax breaks to corporations in exchange for jobs are often modified\u2014in secret\u2014after the fact, a new study finds. Governing magazine reports that the University of Texas at Austin studied 165 awards given out by the Texas Enterprise Fund, which manages such corporate incentives for the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-158","post","type-post","status-publish","format-standard","hentry","category-housingarchive"],"_links":{"self":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/158","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/comments?post=158"}],"version-history":[{"count":0,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/158\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/media?parent=158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/categories?post=158"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/tags?post=158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}