By Bre Payton | Watchdog.org
Politicians like to throw money at big corporations through what are called “targeted incentives.”
Politicians like to make it rain for large companies in their states. Lucille Bluth explains 7 times when those deals failed so bad.
The goal of these incentives are to keep jobs within the state, but so often they just fail.
1. State lawmakers like to give incentives to Walmart in the name of new jobs, but those come with a steep price tag.
Walmart has received 260 special state benefits totaling over $1.2 billion as of 2013.
The kicker: “For every 100 new Walmart jobs, an average of 50 existing jobs disappear as other retailers are crowded out.”
2. But, often times, states end up overpaying for new jobs.
Like that time Louisiana gave Cheniere Energy benefits worth $1.7 billion. In return, “the company was supposed to hire 148 new people and keep 77 existing jobs.”
The kicker: These jobs cost $7.5 million apiece.
3. Or like when North Carolina gave Apple state tax breaks worth $370 million for setting up in their state.
The kicker: Only 50 new jobs were created, and North Carolina ended up paying $7.4 million per job.
4. Unfortunately, North Carolina makes our list twice. The state “paid FedEx $77,000 for each job it created in a new hub.”
5. And South Carolina is no exception, as this state gave a BMW auto plant $68,0000 per year for each job it created.
6. Companies end up sometimes getting other freebies too, like electricity.
Alcoa, an aluminum company, got free electricity from the state of New York for over 30 years. In exchange, the company would promise not to fire more than 165 workers, and make a $600 million investment.
The cost of the deal was an estimated $5.6 billion. Yeah, billion with a ‘B’.
The kicker: “Subsequently, New York raised taxes multiple times on its citizens.”
7. Sometimes, companies will get their own state to throw money at them so they won’t leave.
Like that time the Marriott hotel chain suggested it would leave Maryland for Virginia, and two Virignia counties offered the company $12 and $17 million in subsidies.
The kicker: Maryland policy makers gave Marriott $49–$74 million in subsidies to stay.
Contact Bre Payton at email@example.com or follow her on Twitter @Bre payton.