Shortchanging small business
It is another case of “do as I say, not as I do.” Politicians love to celebrate small businesses and entrepreneurs, but states’ economic development policy overwhelming favors large corporations over the little guy, according to a new study from watchdog Good Jobs First:
An analysis of more than 4,200 economic development incentive awards in 14 states finds that large companies receive dominant shares: 70 percent of the deals and 90 percent of the dollars. The deals, worth more than $3.2 billion, were granted by programs that are facially accessible to both small and large companies…“State economic development spending is profoundly biased against small, local and entrepreneurial businesses,” said Greg LeRoy, executive director of Good Jobs First and lead author of the study. “Our findings definitively confirm what many small businesspeople have long believed.”
Subsidy deals in Louisiana, one of the 14 states included in the study, are particularly tilted toward large companies. From 2009 to 2013, Louisiana approved an estimated $560 million in subsidies through the “Quality Jobs” program, with 79 percent of the deals and 94 percent of the dollars going to large companies instead of small businesses. As LeRoy points out, a better path to economic prosperity is to shift dollars away from corporate giveaways and toward high quality services, like better roads and schools, that help all businesses thrive:
“As a policy solution, we do not recommend simply reallocating deals and dollars,” said LeRoy. “These tax-break deals often mean little to small businesses. Instead, states should reform their incentive rules by tightening eligibility to exclude large recipients. The resulting savings could better fund public goods that benefit all employers and help small businesses with the persistent credit crunch.” Short of excluding big businesses, the report recommends states spend much less on large companies by using safeguards such as dollar caps per deal, dollar caps per job, and dollar caps per company.
Check out the full report, Shortchanging Small Business.
Attention has focused in recent months on the ways low-level offenders end up in jail simply because they don’t have enough money to pay court-ordered fines or post bail. “Debtors prison” was declared unconstitutional by the Supreme Court, and judges are supposed to set up payment plans for defendants who face financial hardship. But that doesn’t always happen. As the New York Times reports, one Alabama judge took a different approach, raising serious ethical questions in the process:
“Good morning, ladies and gentlemen,” began Judge Wiggins, a circuit judge here in rural Alabama since 1999. “For your consideration, there’s a blood drive outside,” he continued, according to a recording of the hearing. “If you don’t have any money, go out there and give blood and bring in a receipt indicating you gave blood.” For those who had no money or did not want to give blood, the judge concluded: “The sheriff has enough handcuffs.”
“What happened is wrong in about 3,000 ways,” said Arthur L. Caplan, a professor of medical ethics at NYU Langone Medical Center, part of New York University. “You’re basically sentencing someone to an invasive procedure that doesn’t benefit them and isn’t protecting the public health.” Reached by phone, Judge Wiggins said: “I cannot speak with you.”
The dozens of offenders who showed up that day, old and young, filed out of the Perry County courthouse and waited their turn at a mobile blood bank parked in the street. They were told to bring a receipt to the clerk showing they had given a pint of blood, and in return they would receive a $100 credit toward their fines — and be allowed to go free.
The blood bank that participated in the involuntary blood drive has since disavowed it and said the employees who participated acted improperly. The Southern Poverty Law Center has filed an ethics complaint against the judge to end the practice. And adding insult to injury, lawyer Sara Zampierin found as she reviewed people’s cases that none had been credited the $100 against their fines as promised.
Major media and good-government groups are divided on this amendment. We’re inclined to agree with Louisiana Budget Project and others: Approval of this amendment could jeopardize the rainy day fund by creating two sub-funds — the Budget Stabilization Subfund and a corresponding subfund for transportation — out of what was once simply a rainy day fund. Bond rating agencies look for a robust rainy day fund in determining how cheaply the state can borrow money. And, although the Public Affairs Research Council of Louisiana offers only pros and cons in its guide to the constitutional amendments and takes no positions, its argument against is compelling: “The amendment shortchanges the state on fiscal stability while delivering only limited new funding to transportation for years to come. The amendment’s transportation spending restrictions unnecessarily limit the state’s flexibility in choosing priority highway projects as well as overall budget priorities.” Vote against Amendment No. 1.
Opportunity to participate in LPB broadcast
Louisiana Public Broadcasting wants your input. This month’s episode of LPB’s public affairs show, “Louisiana Public Square” will focus on early childhood education. Titled “Funding the Future: Early Childhood Opportunities,” the show will be taped before a live audience on Tuesday, Oct. 20th at the New Orleans Center for Creative Arts (NOCCA). The public is invited to attend and will have the opportunity to ask questions. Doors open at 6pm and the one-hour show starts taping at 7pm. The event is free. Click here to register. The show airs Oct. 21st at 7pm on LPB stations around the state.
Number of the Day
$560 million – Estimated amount of subsidies approved between 2009 and 2013 through the Quality Jobs program, with 94 percent of the dollars going to large corporations (Source: Good Jobs First)