Fidelity’s decision has become just the latest in a long line of reasons why we need much greater oversight and accountability for our economic development spending. For far too long, elected officials have made economic development agreements and passed big tax breaks for corporations that have left taxpayers – the ones paying for those subsidies and tax breaks – at a disadvantage.
We’ve given companies subsidies to create jobs with no real strings attached: no monitoring to make sure jobs are actually being created, and no requirements to give the money back if they aren’t. We’ve passed tax breaks for companies, such as Raytheon and Fidelity, with the understanding that a certain number of jobs would be created in exchange – but we didn’t build in any protections for taxpayers when those tax breaks were passed, no clause to say if you eliminate those jobs, your tax break will end.
This “corporations over taxpayers” mentality needs to end in Massachusetts. At a time when we are cutting vital services left and right, it’s time we start demanding that our economic development dollars are spent as efficiently as possible. That means more transparency in economic development spending – from tax incentives to subsidies to tax increment financing (TIF) deals – and more accountability for how that money is used and what results it creates.
Representative Carl Sciortino and I have introduced legislation this session – An Act to Promote Efficiency and Transparency in Economic Development¬ – designed to increase the efficiency of our state’s economic development agencies by improving transparency and strengthening our state’s clawback authority to get taxpayer dollars back if a company breaks its job creation promises. [More Information]
The bill would require companies to make firm job commitments in exchange for economic development support, and would cap the amount of money the state could give a company at $35,000 per permanent, full-time job. (That number is based on the federal CDBG guidelines.)
It would require enhanced reporting and monitoring, to make sure job creation commitments are truly being met. All of this information would be made public, so taxpayers – and legislators – can see how the state’s money is being spent.
Most importantly, it would significantly enhance our clawback authority: if a company failed to live up to its commitment – as Evergreen Solar did — it would require that the company give us our money back.
We can’t change the bad deals that have been made over the past 15+ years. But we can act now to ensure that any economic development agreement we make going forward includes these important transparency and accountability protections for taxpayers. I hope we do it soon – quite frankly, I don’t want to hear about any more companies leaving my district, taking taxpayer-subsidized jobs with them.