School district asks to stop being “robbed”

In zero-sum politics, schools lose out to corporate welfare

Arlene Martinez, Good Jobs First

A school board president calls on an economic development agency to quit taking his district’s money and giving it to corporations; a new hub lets you see where electric vehicle manufacturing jobs are located and importantly, their quality; and new research shows Amazon creates few new jobs in communities where it locates.

Arlene here, with the latest on what we at Good Jobs First have been up to during the dog days of summer.

But before we dive in, don’t miss the story of the Jersey City Council taking the first step to rescind a 20-year tax break given to the owner of an Amazon warehouse. 

Amazon is required to ensure at least 51% of its new hires are from Jersey City, which makes sense, considering its residents are the ones footing the tax bill. But Amazon is failing to deliver, the Hudson County View reports.

Tax Abatements Drain School Funding

When a company comes to town looking for tax breaks, their big prize is usually a property tax abatement. For most businesses, it’s the biggest tax they pay – so not having to pay it is a big subsidy. But that tax avoidance hurts schools the most, since property taxes remain K-12’s biggest revenue source. Kids lose billions of dollars annually.

Our study analyzing the impact of corporate tax breaks on school districts across the country found 149 schools districts were losing more than $1,000 per student per year.

One school board on Long Island, New York is taking action.  Prompted by a disputed deal, the Riverhead Central School District has asked the local Industrial Development Agency – in New York, IDAs have authority to unilaterally give school districts’ money away – to stop abating the school’s share of the property tax..

Over the past decade, the school district has been “robbed” of over $15 million, Riverhead Board President Colin Palmer wrote.

“This is money that could have been allocated to helping the District increase its classroom capacity to meet growing student enrollment, introduce new educational programs and services, provide greater social-emotional support programs for our students, expand our technology capabilities, and offer additional professional development opportunities for our faculty,” Palmer wrote in a letter that appeared on the media outlet RiverheadLocal.

As concerning is that the IDA does not independently evaluate whether the project actually needs subsidies, Palmer wrote.

Currently, up to 650 new residential units could be built in the school district, and all/most could be eligible for IDA-granted tax breaks. That could mean the district will get scores of new students, but most of the money that would normally go toward giving them the best possible educational experience would instead be funneled to developers’ wallets.

One last point: market-rate residential construction should rarely, if ever, be subsidized in part because it creates next to no permanent jobs (plus other reasons). So yes, leave the schools out of the deal but better yet, don’t give market-rate projects subsidies at all.

Electric Vehicle Jobs Hub = Where and How Good

The BlueGreen Alliance Foundation and Atlas Public Policy just launched a new dashboard that includes information on electric vehicle manufacturing jobs across the United States.

The EV Jobs Hub maps where new EV facilities are being sited, numbers of announced jobs, whether the facility is covered by a union, and, via Good Jobs First’s Subsidy Tracker, how much in subsidies they’re receiving.

Building up the EV industry is a huge part of the Inflation Reduction and Infrastructure Investment and Jobs Acts (IRA and IIJA), which direct billions of dollars to EV/battery companies, charging stations, and car-buyers.  

But as we documented recently, a $200 billion provision of the IRA lacks any mandate for companies to create good-paying full-time jobs with benefits including sick pay and family leave.

The dashboard is a way to hold manufacturers and policymakers accountable for fulfilling their promises of good, clean jobs.

Speaking of IRA and also the CHIPS and Science Act, our advocacy director Judith Barish wrote more about what needs to be done to ensure they’re successful in their goals of reducing inequality and righting environmental injustices.

Amazon Doesn’t Create New Jobs

Two economists used Subsidy Tracker to determine whether billions of taxpayer dollars given to Amazon benefit communities.

Their top finding: “Our analysis suggests that these subsidies have been largely ineffective at creating jobs.”

Dr. Ike Brannon with the Jack Kemp Foundation and Prof. Matthew Winden with the University of Wisconsin-Whitewater used our database to get information on how much and where Amazon has gotten incentives, then looked at regional employment, wages, and economic activity to gauge the company’s impact on job creation.

I interviewed Brannon, who is based in Washington, D.C., about their findings. There are better ways to do economic development, Brannon explained.

Read our conversation.