It’s the beginning of the month and the NYTimes.com pay-wall lets its guard down. One item I found while binging on ten free articles was a detailed report about government tax incentives and assorted breaks given to companies nationwide. The accompanying state by state data base shows Vermont spends $407 million per year on incentive programs.
States, counties and cities nationwide are, by The Times’ best estimate, giving large and small companies $80 billion per year in assorted breaks. Yet accountability and oversight is often spotty even though the amounts are often substantial.
A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. […] Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.
Endlessly it seems large and small companies are asking for and receive tax breaks, grants, and waivers designed supposedly to encourage them to hire, expand or just not abandon their location for greener pastures. These are behaviors business would perform anyway in the normal course of events, but in theory, incentives nudge businesses this way or that in hopes of benefiting the public good. Many jobs are certainly saved or created, but the leverage is with corporations and businesses in what is called
a high-stakes bazaar where they [corporations] pit local officials against one another to get the most lucrative packages.
Here in Vermont 31cents per dollar of budget is spent on incentive programs according to the Times.
More after the break
In the New England states the high rollers understandably are Massachusetts at $3.08 billion and Connecticut at $860 million. Then comes Maine which is third at $504 million, followed by Vermont’s $407 million, Rhode Island’s $356 million, and New Hampshire lives free or dies at $39 million.
Vermont spends at least $407 million per year on incentive programs, according to the most recent data available. That is roughly: $650 per capita or 31¢ per dollar of state budget
• Top Incentives by type
1. $359 million in sales tax refunds, exemptions or other sales tax discounts
2. $40.8 million in cash grants, loans or loan guarantees
3. $3.15 million in corporate income tax credits, rebates or reductions
• Top Incentives by industry
1. $333 million in Manufacturing
2. $24.8 million in Agriculture
3. $1.8 million in Alternative energy
• Grants to Companies (601); State Programs (22)
VtDigger.com reports that in 2012 a report by the Vermont Economic Progress Council which oversees the VEGI (Vermont Employment Growth Incentive) program, created 1,328 jobs in three years, and paid out $1.95 million in cash incentives. The jobs they report brought the state $5.26 million in income tax revenue.
Thirty one cents per dollar of budget is something to keep in mind as Vermont’s annual budget cutting season nears.