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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
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.
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
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%)
“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
www.goodjobsfirst.org/shortchanging
14 States, 16 programs,
4,228 Deals, $3.2 Billion
Methodology
Extensive research on companies’
Size
Parent/ownership
Location(s)
Number of establishments
www.goodjobsfirst.org/shortchanging
Findings
70% of awards
90% of dollars
www.goodjobsfirst.org/shortchangingwww.goodjobsfirst.org/shortchanging
www.goodjobsfirst.org/shortchanging
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
Policy Recommendations
Narrow eligibility to exclude large
recipients
Establish dollar caps per deal, per job
and per company
www.goodjobsfirst.org/shortchanging
www.goodjobsfirst.org/shortchanging
Contact Us
Greg LeRoy
goodjobs@goodjobsfirst.org
202-232-1616 x 211
www.goodjobsfirst.org/shortchanging
Subsidy Tracker
Methodology, cont.
www.goodjobsfirst.org/shortchanging
goodjobsfirst.org/subsidy-tracker
NETS
www.goodjobsfirst.org/shortchanging
Methodology, cont.
Company websites
Original program
data
www.goodjobsfirst.org/shortchanging
Press releases
Other news sources
Methodology, cont.

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