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Shortchanging Small Business

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Greg LeRoy of Good Jobs First discusses the dominance of large businesses in state economic development incentive programs

Published in: Government & Nonprofit
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Shortchanging Small Business

  1. 1. Shortchanging Small Business: How Big Businesses Dominate State Economic Development Incentives Greg LeRoy ~ Good Jobs First Lincoln Institute & Boston Federal Reserve December 4, 2015 ~ Cambridge
  2. 2. Good Jobs First Since 1998, a non-profit, non-partisan resource center promoting accountability in economic development. www.goodjobsfirst.org www.goodjobsfirst.org/shortchanging Acknowledgements Thanks to the Surdna Foundation and the Ewing Marion Kauffman Foundation. All findings and policy conclusions are our own.
  3. 3. Are Incentives Fair to Small Business?  Surge in “megadeals” since 2008  Post-recession credit crunch  “Economic war among states” on steroids  40 groups with 24,000 small business members polled
  4. 4. In Search of A Level Playing Field  92%: incentive spending biased toward big business (69% strongly)  79%: overspending on big deals, hurting state finances (56%)  87%: small business interests in economic development not effectively represented in state capital (36%)  85%: incentives not meeting needs of growing small businesses (36%)
  5. 5. “Shortchanging” Program Selection No or low barriers to entry: Up to 10 jobs Up to $100,000 Investment Data available via Subsidy Tracker www.goodjobsfirst.org/shortchanging
  6. 6. www.goodjobsfirst.org/shortchanging 14 States, 16 programs, 4,228 Deals, $3.2 Billion
  7. 7. Methodology Extensive research on companies’ Size Parent/ownership Location(s) Number of establishments www.goodjobsfirst.org/shortchanging
  8. 8. Findings 70% of awards 90% of dollars www.goodjobsfirst.org/shortchangingwww.goodjobsfirst.org/shortchanging
  9. 9. www.goodjobsfirst.org/shortchanging
  10. 10. Definitions Small 100 employees or less AND independent & local AND 9 or < establishments www.goodjobsfirst.org/shortchanging Large 100 employees or more OR not independent & local OR >9 establishments
  11. 11. Policy Recommendations Narrow eligibility to exclude large recipients Establish dollar caps per deal, per job and per company www.goodjobsfirst.org/shortchanging
  12. 12. www.goodjobsfirst.org/shortchanging
  13. 13. Contact Us Greg LeRoy goodjobs@goodjobsfirst.org 202-232-1616 x 211 www.goodjobsfirst.org/shortchanging
  14. 14. Subsidy Tracker Methodology, cont. www.goodjobsfirst.org/shortchanging goodjobsfirst.org/subsidy-tracker
  15. 15. NETS www.goodjobsfirst.org/shortchanging Methodology, cont.
  16. 16. Company websites Original program data www.goodjobsfirst.org/shortchanging Press releases Other news sources Methodology, cont.

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