States and local governments provide companies with more than $80 billion a year in tax incentives, but those incentives don’t necessarily provide the results governments are hoping for, according to the New York Times.
When General Motors announced a list of plant closings in 2009, at least 50 of the locations on the list were in states and towns that had provided the company with incentives. The article cites Ypsilanti, Mich., which paid General Motors more than $200 million over the years only to have the car maker close both its factories in Ypsilanti. The town is now suing GM.
At a time when many state governments are under considerable financial stress, the Times analysis, which included putting together a database of state programs, found incentives are a considerable expense for some. Incentive programs in Oklahoma and West Virginia come to about a third of the states’ budgets, it says, while Maine’s program amounts to about a fifth.
According to the Times, Texas awards the most incentives of any state, at more than $19 billion a year.
See the full story here.