Boston Globe questions tax incentives for companies promising jobs

These are some of the companies that Boston Globe reporter Todd Wallack found had received tax incentives in Massachusetts.

Todd Wallack

Todd Wallack of the Boston Globe writes about the lack of followup on tax breaks that cities and states use to lure companies. In Massachusetts, he found that no one checks back to ensure that the companies keep their hiring promises. He writes:

“A Fall River rubber parts maker pledged to create 20 jobs, but cut 36 instead. A manufacturer in Orange promised to add five full-time jobs, but cut a half-dozen or more instead. But even when jobs are cut, the state often takes years to end a tax break, if it takes any action at all. And officials could not name a case in which they asked a company to repay subsidies already pocketed.”

The story also cites specific examples of companies receiving financial incentives, even though they planned to locate in a certain municipality any way. It also calls into the question the rubber-stamp approval process that one source calls a “poker game.” The package includes an interactive map of where subsidies have gone and a slide show of recipients.

The Lexington (Ky.) Herald-Leader did a similar series of stories in 2005 called “Gambling for Jobs” that also found companies that got incentives to create jobs often failed to hire the number of workers promised.

Ask around to see if the credits were a lure to prevent a company from going elsewhere or simply “icing on the cake.”

Talk with accountants in your area to see whether businesses are taking advantage of tax credits for adding employees. Businesses are required to include the head counts on their tax forms.

Also, check out Good Jobs First, which looks at tax incentives for  larger companies.

Finally, check your archives for announcements of recent deals, and call state and local officials for a progress report.