Tax Breaks for Select Few Companies Not Creating Jobs

A study by Good Jobs First indicates that Pennsylvania’s tax incentives for high-tech companies has not been able to attract investment from other states. A net 43 high-tech companies have moved to Pennsylvania between 1990 and 2006, and the Commonwealth has experienced a net loss of 2,850 jobs. (HT Central Penn Business Journal)

The Ben Franklin Technology Development Authority Fund, which is the most expensive technology development program, gave over $62 million in grants and loans in 2007-08. Yet the report reveals, “those facilities that do move in or out are mostly very small: more than three-fifths have fewer than five employees. Most net in-migrations are from neighboring states, especially New Jersey, New York, and Maryland.” These states are also ones with the worst economic climates.

Governor Ed Rendell and legislators continue to tout technology investments as a successful. Yet, reports from the Auditor General’s office and other independent organizations indicate fraud, inaccurate data and lack of accountability in many corporate welfare programs. For instance, an evaluation of the Keystone Opportunity Zone Program found that once a number of jobs are pledged by an organization receiving grants or loans, that number is used for indicating “jobs created”, without the actual number being tracked or accounted.

In times of recession academics find that “at best these policies do not work, and at worst they’re counter productive and wasteful.”

So, not only are programs not creating jobs for the Commonwealth, but jobs are being leaked to other states which do not have such monolithic programs.