Rick Perry, Corporate Welfare and Pennsylvania

Texas Governor and Presidential Candidate Rick Perry has taken some flak recently for “job creation” funds, which largely direct taxpayer funds to corporations and special projects. This is commonly known as corporate welfare.

While the popular phrase claims “everything is bigger in Texas,” that doesn’t hold true when in comes to corporate welfare. Pennsylvania’s handouts to corporations dwarf those in Texas despite the Keystone State having about half the population. Ohio leads the nation with the dubious honor of most corporate welfare, according to the latest data.

The top three states in economic development spending all lost jobs between 2002-2010.  In fact, it would seem Texas added jobs in spite of corporate welfare spending.

Expenditures on Economic Development Programs FY 2010
Top Five States
Rank State Total Economic Development Resources Available Per-Capita Job Growth 2002-10
1 Ohio $860,594,397 $74.56 -7.97%
2 Pennsylvania $754,651,000 $59.87 -0.03%
3 California $734,225,000 $19.86 -4.03%
4 Texas $598,136,155 $24.14 11.15%
5 New York $589,496,820 $30.17 0.28%
Source: State Economic Development Expenditure Database, The Council for Community and Economic Research (http://c2er.org)

While this year’s General Fund Budget reduced corporate welfare spending and consolidated some programs, there remain a number of other subsidies and incentives in Pennsylvania. These include the Redevelopment Assistance Capital Program (RACP), issuing state bonds for projects such as sports stadiums; independent state agencies such as the Commonwealth Financing Authority, which issues its own debt to implement Pennsylvania’s “stimulus” program; and targeted tax breaks such as the film tax credit.

Here are a few, but almost certainly not all, the various programs Pennsylvania has offering welfare to corporations and economic development groups—all in the name of “creating jobs.”

Corporate Welfare Grant & Loan Programs 2011-12 Budget (Thousands)
General Fund
Ben Franklin Tech Development Authority Transfer $14,500
Commonwealth Financing Authority Transfer $82,019
Pennsylvania First $25,000
Partnerships for Regional Economic Performance $11,880
Discovered in PA Developed in PA $9,900
Infrastructure and Facilities Improvement Grants $19,409
Industry Partnerships $1,613
Capital Budget
Redevelopment Assistance Capital Program Bonds $270,000
Independent Agencies
Commonwealth Financing Authority Borrowing $125,000
Pennsylvania Economic Development Financing Authority ?
Pennsylvania Industrial Development Authority ?
Tax Credits
Film Tax Credit $75,000
Job Creation Tax Credit $22,500
Research and Development Tax Credit $40,000
Keystone Opportunity Zone $18,700
Keystone Innovation Zone $25,000
Alternative Energy Production Tax Credit $5,000
Total Spending and Credits $745,521