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Two years ago Amazon announced plans to build a second headquarters in North America and invited cities to vie for the 50,000 jobs that facility would provide. More than 200 cities responded with incentive proposals.
But companies don’t always deliver on such job promises. News broke in January that Global electronics company Foxconn failed to meet its 2018 job target for a new plant in Racine County, Wisconsin.
That disclosure was unusual, not because it’s so rare for companies that receive tax breaks and other incentives to miss stipulated job quotas, but because that information isn’t usually made public.
It took an audit of New York’s Excelsior Jobs Program in 2016 to reveal that staff there routinely lowered job targets when recipients were close to not meeting them.
“New York state gives away millions of dollars each year in tax breaks for companies that are supposed to create jobs and expand under the Excelsior program,” state Comptroller Thomas P. DiNapoli said at the time. “Oversight leaves a lot to be desired.”
A University of Texas at Austin study revealed that the Texas Enterprise Fund amended 46, or about 25 percent, of the 165 contracts for corporate incentives it has awarded, usually to lower job targets or extend the schedule for meeting them. The rate may actually be higher, but many incentive recipients have contested the university’s public records requests.
“This finding, from a single state, is troubling,” said Nathan Jensen, the author of the study. “If companies can not only secretly renegotiate the rules, they can also make sure that public records laws shield them from revealing these renegotiations.”
The two states Amazon initially chose for its new headquarters, New York and Virginia (although the company recently canceled its planned New York facility), both agreed in their deals to notify the company when any public records requests were made so it could challenge them it court. (GOVERNING, WISCONSIN STATE JOURNAL [MADISON], NEW YORK TIMES)