The budget news is grim in some states. Twenty states face a combined
budget shortfall of at least $35 billion for 2009, according to analysis by the Center on Budget Policy & Priorities (see CBPP graph below). Another 8 states will likely have budget problems next year or the year after.
State creates economic development program to
encourage business investment in the state. State hands out billions in
economic subsidies. State finds out many companies have taken the cash and
failed to deliver on promised
Target management apparently didn't get the memo. Faced with stagnating
wages and increasing inequality, American workers and taxpayers are
waking up to the big box gambit where irresponsible employers subsidize
their low wages through favorable tax packages. When Target threatened
to stop opening new stores in Chicago if the Windy City gave final approval to its ordinance requiring a living wage for retail workers (see this Dispatch
for more details), it opened up a new debate over why cities are
offering low-wage retail stores tax subsidies in the first place. As a new report
produced by the Neighborhood Capital Budget Group documents, Target
received $9.9 million in tax-increment financing (TIF) to subsidize its
existing stores in Chicago.
State governments offer businesses tens of billions in tax incentives
each year to invest in their states-- corporate subsidies that many
advocates see as wasteful giveways but that others see as a lifeline for their communities.