Why Companies Should Be Held Accountable
American companies are the most competitive in the world, and they have figured out how to make the most of it. They sometimes engage in highly publicized "decision-making" about where they should locate or expand their operations. When they do this, they invite states and cities across America to lure them with lucrative offers of tax breaks, loans, grants, and other special incentives. We taxpayers subsidize these firms when they receive incentives from state and local governments. And it costs us billions of dollars that could otherwise be invested in schools, roads, public safety, and other programs.
If we are going to use tax dollars to subsidize corporations, shouldn't we make sure our investment is a good one? That's what more and more people are demanding from their elected officials. In cities and states across America, companies are being asked to guarantee that they will create the number of jobs they promise, at good wages, and with good benefits. And in some places companies even have to pay back their incentives if they don't keep their promises. After all, it's the least we can do to protect our investments.
Here are some measures cities and states use to make corporations accountable to their communities:
Clawbacks
These measures require companies to pay back their incentives if they don't keep their promises.
Wage requirements
These measures target incentives to firms paying good wages.
Benefits requirements
These measures target incentives to firms providing basic benefits packages.
Job creation targets
These measures require companies to create a specified number of jobs.
Public participation laws
These measures give citizens a role in deciding whether a firm gets incentives.
High impact project provisions
These measures attach strings to really big economic development projects, like the United Airlines facility in Indianapolis.
