PSN Blog

Every year, states spend billions on tax credits, subsidies and cash grants to corporations and industries in the name of economic development.  With the stagnant recovery and still high unemployment rates, there is mounting scrutiny on whether these programs are actually creating jobs. 

A new report from Good Jobs First, which surveyed 238 economic development programs across the country, shows that while many states have at least some performance requirements, almost half don’t have any job creation, retention or training standards.  The programs with no job creation requirements are costing states over $7 billion a year.   

Phil Mattera, Research Director at Good Jobs First and the Reports principal author said, “If subsidies do not result in real public benefits, they are no better than corporate giveaways. States should be using these programs to reduce unemployment and raise living standards, not simply to increase corporate profits.”

The report grades every state on how effectively it ties job standards to major economic development subsidies. See how your state ranks here.

Many states are finally taking a more balanced approach to their budget troubles by looking to raise revenue to avoid further deep cuts to education and health care, including New York which recently restructured their tax structure to generate more revenue from millionaires and California which is considering the same. These kinds of reforms will help states shore up their immediate revenue shortages, but will also bring long-term stability and flexibility as they look to rebuild their economies in the years to come. However, there are a handful of states that don’t currently have the option of generating revenue this year by taxing wealth because they lack a state income tax, making them more vulnerable to lagging revenues in a prolonged downturn like we’re experiencing now. This is certainly the case for a state like Washington, which has experienced some of the most severe budget deficits over the past three years, because they are too dependent on the state sales tax as a revenue stream. That’s why the Washington State Budget & Policy Center is building support for a proposal to tax the capital gains of the state’s wealthiest residents.  

Once implemented, a capital gains tax could generate up to $1 billion a year for Washington state, providing much needed revenue to begin to reinvest in the education, health and other public structures that have taken such a dramatic hit over the past three years. The proposal currently being advanced would place a 5% percent tax on capital gains, while allowing for a reasonable exemption threshold to ensure that 97% of state residents wouldn’t pay additional taxes. 

There are currently nine states in the country with no state income tax, and none of them tax capital gains broadly (although Tennessee and New Hampshire tax interest and dividend income). As the graph below shows, a strong majority of states already tax capital gains at 5% or higher:

(Click map to enlarge.)

Washington has already seen $10 billion in cuts to education, health care, public safety and a host of other critical programs and services over the past three years, and again faces a significant budget hole this year. This proposal is the kind of sensible and forward-thinking solution that would help the state rebuild from the devastating impact of the Great Recession in the coming years, while also helping to protect against future downturns by providing more stability and flexibility to the tax structure. Other states in Washington’s predicament would be smart to consider similar measures.

As states across the country scramble for solutions to another year of deep budget troubles, a report released today finds that some of the nation’s largest and most profitable corporations aren’t paying their fair share in state taxes – by a long shot. Co-released by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy, the report finds that a quarter of the corporations surveyed paid no state corporate income tax in at least one of the last three years.  Collectively, the corporations surveyed cost states more than $40 billion over that time.

Over the past three decades, corporate income taxes have continued to shrink as a share of total state revenues, from nearly ten percent in 1980 to less than six percent today.  The study is a companion to a report released last month that found these corporations were dodging taxes at the federal level too.

Matt Gardner, Executive Director of the Institute on Taxation and Economic Policy said of the findings, “These corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes. They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.”

You can access the full report here.

Exactly one year ago, conservatives swept the states on Election Day, thanks to promises to focus on jobs and the economy. But in states where conservatives were able to advance their agenda in 2011 sessions, voters only saw attacks on workers, the middle class, women, immigrants, and historically disenfranchised communities.

This week, voters from every corner of the nation - form Ohio to Maine to Arizona to Mississippi - sent a striking and direct message in response, rejecting the overreach of right-wing legislatures and governors in 2011 on a range of issues.

In Ohio, Senate Bill 5 - a law that was forced through the state legislature this spring to strip law enforcement officers, firefighters, and other public employees of fundamental collective bargaining rights - went down in flames at the polls. After consistent polling that saw Senate Bill 5 broadly unpopular with voters, a grassroots effort to gather 1.3 million signatures to put it on the ballot, and a campaign that saw corporate interests flood the state with money in attempt to save it, the measure was decisively rejected at the polls by a landslide margin of 61%-39%.  As The Nation's John Nichols describes it, the massive margin of victory in Ohio was not just a victory for unions and public workers, but "a rejection of the crude politics of austerity that would balance budgets in the backs of working families in order to reward CEOs and banksters."

In Maine, another controversial, unpopular right-wing legislative attack from 2011 was on the ballot: the ban enacted this session on the state's widely popular, four-decade-old election practice that allows new voters to register on Election Day. After collecting signatures to put the law up for a "people's veto," voters in Maine ended up restoring same-day registration by a huge margin similar to the one seen in Ohio: 61%-39%. A majority of voters in every county in Maine voted to restore same day registration. Shenna Bellows, director of the American Civil Liberties Union of Maine, told the Bangor Daily News that "Maine voters sent a clear message: No one will be denied a right to vote... Voters in small towns and big cities voted to protect our constitutional right." 

Social issues were not nearly as prevalent on state ballots as they have been in previous years, but the most prominent and extreme of them ended up being decisively rejected. In Mississippi, an extremist anti-abortion constitutional amendment that would have defined a fertilized egg as a "person" under state law was dismissed by more than 55% of voters statewide.

Meanwhile, special elections in a handful states also signaled a backlash against extremist right-wing social policies, attacks on immigrants, and other measures that they have seen pass in their states and others under conservative control. In a bold rejection of Arizona's economically destructive anti-immigrant legislative policies, the author of SB1070, State Senate President Russell Pearce, was defeated in a recall election, becoming the first Arizona legislator ever to lose a recall election, and the first senate president in any state to ever be recalled. In Michigan, a state legislator was defeated in a recall election for the first time in 28 years in what was seen as a referendum on his support of education cuts and attacks on the bargaining rights of teachers. And in Iowa, voters in a legislative special election decided not to give conservatives full control of the state senate, fearing that they would push through extremist legislation possibly including a repeal of same-sex marriage. 

Election Day results weren't entirely positive for progressive policies across the nation - a symbolic attack on health care reform passed in Ohio and a voter suppression measure passed in Mississippi. And while the message of rejection of right-wing overreach was loud and clear, proactive progressive measures were by and large missing from the ballot this November. With the public clearly on their side on economic issues in poll after poll, and with the 99% movement opening political space for policies that truly grow jobs and state economies, support the middle class, and reduce economic inequality, it will be up to progressives in 2012 to seize the initative and capitalize on the growing rejection of failed conservative policies in the states.

Preventing exceedingly rare voter fraud is not worth the very real consequences to electoral participation among the elderly, youth, and communities of color. That's the message being sent by state legislative leaders across the nation, three of whom - State Del. Jon Cardin (MD), State Rep. Joe Miklosi (CO), and State Rep. Ben Cannon (OR) - co-wrote an op-ed published in the Baltimore Sun this week:

A healthy civic society requires protecting citizens' fundamental right to vote while ensuring the integrity of our electoral system. Sadly, this goal is being jeopardized by a coordinated, nationwide effort to enact voter ID laws that will not solve the challenges facing our electoral systems and will instead disenfranchise voters and infringe upon the fundamental American right to free and fair elections.

The real effect of voter ID laws is not to prevent fraud but to disenfranchise millions of deserving voters. Studies have shown that about 21 million Americans, or 11 percent of eligible voters, currently lack a valid photo ID. However, those percentages rise to as high as 25 percent for African-Americans, 15 percent for low-income voters, 18 percent for seniors and 20 percent for voters under 30. You may notice a pattern here: many of these demographic groups are progressive base voters....

The campaign by narrow special interests to strip away the fundamental rights of our citizens through voter ID requirements is disingenuous. There are far better methods to address the challenges in our electoral systems, and we urge our colleagues across the country to join us in modernization efforts that will maximize voter access, reduce costs to taxpayers, improve security and help us stay true to the bedrock principles upon which our country was founded.

The destructive effects of state voter ID laws are becoming more and more painfully clear in other states as well. Tennessee’s new voter ID law is barely five months old and, already, it’s disenfranchising the state’s elderly voters.  Last week’s heartbreaking story about a 96-year-old Chattanooga resident who was denied a voter ID is, unfortunately, likely the first of many that are sure to surface as GOTV efforts ramp up for the 2012 elections. 

Dorothy Cooper,  96-year-old Chattanooga resident, found someone to drive her to a state Driver Service Center so she could obtain the ID she now needs in order to excercise her right to vote, stood in line with her walker, and presented a packet of materials that included her rent receipt, a copy of her lease, her voter registration card, and her birth certificate – and still couldn’t obtain her voter ID because she lacked a marriage certificate to document her married name.  In seven decades of going to the polls, Cooper said she had never had problems – not even during the Jim Crow days prior to passage of the Voting Rights Act in the 60’s – until now. Yet even when seniors have driver’s licenses, they are not out of the woods in Tennessee.  The state does not require seniors over 60 to have a picture on their license; of 230,000 who opted not to get a picture on their license, about 126,000 are registered to vote.   

Around the nation, legislators and the public alike are realizing the nefarious, partisan intent behind voter ID laws, intented to address what the New York Times accurately characterized in an editorial this week as "The Myth of Voter Fraud." The editorial board notes that the assault on voting rights is not limited to voter ID - and it is not rooted in any actual desire to address fraud:

Other states are beginning to require documentary proof of citizenship to vote, or are finding other ways to make it harder to register. Some are cutting back on programs allowing early voting, or imposing new restrictions on absentee ballots, alarmed that early voting was popular among black voters supporting Barack Obama in 2008. In all cases, they are abusing the trust placed in them by twisting democracy’s machinery to partisan ends.

This week’s misguided ruling by a federal judge in Alabama that upheld parts of the harshest anti-immigrant state law in the nation, HB 56, is a devastating setback to our nation’s deeply held values, Alabama’s economic prosperity, and the well-being of all Alabama residents. The Alabama decision does not represent existing and binding Supreme Court precedent, and it stands as an outlier in stark contrast to other recent federal rulings on similarly draconian anti-immigrant laws, including Arizona’s SB 1070, where the courts have ruled similar provisions unconstitutional — including those that require law enforcement officials to ask for immigration papers from anyone they suspect on sight of being undocumented. If allowed to stand, this decision would put countless Alabama families and children in danger, drive taxpayers out of the state, sink Alabama’s economy, and set a chilling example that other states would be foolhardy to follow.

The confusing decision set down by U.S. District Judge Sharon Lovelace Blackburn upheld some of the most extreme parts of HB 56. These provisions include one requiring that schools look into the immigration status of students and their parents — a requirement that stands in direct contradiction to established Supreme Court precedent that ensures all students of families living in the United States access to a public school education. Other provisions of the law that Judge Blackburn rashly and erroneously concluded should be allowed to stay in effect includes language that makes it a crime to fail to carry immigration documents, mandates that undocumented immigrants driving without a license be jailed indefinitely, and restricts contracts between government, private citizens, and immigrants, that may limit access to housing and even such basic utilities as water service for undocumented workers. Many of these provisions were upheld despite being explicitly rejected by other courts, and the judicial process should eventually conclude that the arguments presented by proponents of HB 56 do not hold water.

More broadly, the judicial process underway in Alabama should send a clear message to other states considering anti-immigrant bills — which failed in many states this year, most recently in New Mexico — that enacting economically destructive anti-immigrant measures opposed in almost all cases by a wide spectrum of local businesses, religious groups, civil rights groups, law enforcement officials, and community groups is a road to economic catastrophe. Undocumented workers in Alabama paid $130.3 million in state and local taxes in 2010, and comprised roughly 4.2% of the state’s workforce (or 95,000 workers) in 2010, according to recent reports. Recent analyses have concluded that the state could lose an astounding $2.6 billion in economic activity if the provisions in the law were allowed to stand and all undocumented immigrants and their families removed from the state. But even if the blatantly unconstitutional parts of the law are eventually rejected by the courts, Alabama and other states that may follow their path by pursuing anti-immigrant laws are already ensuring economic damage to their states. Even Arizona is now coming to the realization that anti-immigrant laws have been disastrous for their states. Earlier this year, dozens of Arizona CEOs, representing corporations such as US Airways, Intel Corp., and The Arizona Republic, wrote a letter expressing opposition to further anti-immigrant measures, realizing the already monumental economic damage that has already resulted even though the most drastic provisions have been prevented from taking effect by the courts.

The evidence is clear: anti-immigrant laws such as those pursued by Alabama kill jobs, hurt state economies, endanger communities, and drive away taxpayers — in addition to systematizing discrimination in a manner that clearly does not represent American values. Laws like these are also a body blow to state budgets around the nation, still struggling from historic revenue shortfalls, and which will now be forced to account for millions defending them in expensive and needless legal battles. Just this week, it was reported that the Department of Justice was looking at challenging anti-immigrant measures in Utah, Georgia, Indiana, and South Carolina, in addition to the current legal challenges underway in Arizona and Alabama.

There is another approach being advanced at the state level. State legislators across the nation working with State Legislators for Progressive Immigration Policy (SLPIP) have been on the front lines in developing, introducing, and advancing immigration measures that would grow state economies, create jobs, and result in safer and healthier communities. For example, instead of driving away talented immigrant students, these lawmakers are proposing tuition equity measures that will help keep a skilled workforce in their respective states. Business leaders representing major companies and forward-thinking elected officials have also been strongly highlighting at both the congressional and state levels the need for immigrant workers to stay here and power the nation’s economy forward, because they know that being pro-immigrant is good for business.

The cost of laws like HB56 to our nation’s values and to our states’ bottom lines could not be clearer. Anti-immigrant laws like these represent fundamentally irresponsible wastes of public resources, and ineffective approaches to immigration. Flawed and indefensible rulings like Judge Blackburn’s should not confuse the matter: anti-immigrant state laws like Alabama’s are not only unconstitutional, they are a path to absolute ruin for state economies.

In his address before a joint session of Congress on Thursday evening, President Obama laid out a $447 billion package of policies intended to spur desperately needed job creation. A breakdown of the American Jobs Act shows a mix of proposals including targeted tax cuts and spending that have been supported on a bipartisan basis in the past, and which altogether are estimated to increase employment by up to 4.3 million jobs over the next two years.

States are set to be key players in many of the efforts outlined in the plan. In addition to providing desperately needed direct aid in the amount of $35 billion to states and local governments still struggling with historic revenue shortfalls (funding that is predicted to add 135,000 public and private sector jobs in 2012) as well as $30 billion in funding to modernize schools and $49 billion to continue extended unemployment benefits, other policies in the American Jobs Act echo innovations that have already been enacted with widespread support in states across the nation.

One such proposal, work-sharing, was enacted in the state of Maine this year with unanimous and bipartisan support in a legislative session that, like many across the nation this year, was brutally contentious. By allowing workers to keep their jobs while working fewer hours and collecting partial unemployment benefits, the policy has already allowed employers the flexibility they need to retain their workforces in many states. Dean Baker of the Center for Economic and Policy Research suggests that if the policy is as successful on a national basis as it has been in other countries, it would result in millions of new jobs.

Another piece of the American Jobs Act that was presaged by success in the states this year is the banning of employer discrimination against the long-term unemployed. New Jersey Gov. Christie signed similar legislation into law this year, and other bills protecting the record numbers of Americans who have found themselves out of work for extended time periods since the recession began were introduced in states including New York and Michigan. In many states, these policies have been enacted with bipartisan support — and there is no reason policies like these should not win broad support in Congress as well. Regardless of their ultimate fate in D.C., both will continue to be priorities for state legislators in 2012 looking to ensure the job security of their constituents.

Other recently enacted state policies that were highlighted in the President’s jobs plan require more caution and scrutiny. A program in Georgia that allows workers to train on a voluntary basis with a potential employer while still receiving unemployment benefits received praise in the President’s speech, but the National Employment Law Project has underscored the potential danger of it and similar programs that mix voluntary work with unemployment insurance. Oversight and accountability of programs like this are clearly needed.

And while economists are broadly predicting that the package proposed by the President would significantly boost the economy and directly grow jobs, questions remain about how the fully paid-for package will indeed be paid for. In his speech this week, the President outlined the need to make “modest adjustments” to Medicare and Medicaid — proposals which he is expected to elaborate on as he releases a deficit reduction plan later this month, and which would also affect state economies directly and possibly painfully.

The Senate Democratic Steering and Outreach Committee released the following document outlining the impact of the American Jobs Act for all 50 states — scroll down to see all of the numbers on how the jobs plan is expected to affect your state:

The American Jobs Act - State by State

It has been more than 90 years since women fought their way to suffrage. In that period of time, we’ve experienced the Year of the Woman – when a record number of women ran and/or won congressional races in 1992 – and voter turnout rates for women that have consistently exceeded voter turnout rates for men since 1980. The gender gap that often gives Democrats the edge among female voters (except in 2010) and proved to be Ronald Reagan’s “woman problem” has forced all candidates to acknowledge the power of the female vote. Despite this growing clout, 2011 saw a barrage of state legislation that effectively moves women’s suffrage back in time and impedes access to the polls for millions of us.

The passage of voter ID legislation made headlines this year for its anticipated horrific effects on the electoral participation of minority, low-income, and young voters. However, its specific detrimental impact on women was less publicized. According to a survey sponsored by the Brennan Center, only 66% of voting-age women with access to any proof of citizenship have documentation with their current legal name. Using numbers from 2000, this may leave as many as 32 million voting-age women vulnerable to the whims of conservatives trying to suppress the vote of traditionally progressive voting blocs through voter ID. Of the whopping 33 states that introduced bills this year to require photo identification at the polls, so far, eleven state legislatures have passed the measures. Voter ID has been signed into law in seven states to date.

Similarly, attempts to shorten the early voting period – in which voters can cast a ballot before Election Day at satellite locations – and eliminate weekend voting were successful in five states this year. These measures make it that much harder for busy women to have their voices heard by taking away the flexibility needed to accommodate work and familial obligations.  Women in these states will once again be forced to choose between participating in democracy and, say, picking up a child from day care – a discomfiting situation of which Elizabeth Cady Stanton and Lucretia Mott would surely disapprove.

It is time for women to not only take advantage of the right to vote for which so many fought, but to invoke the passionate dissent that marked the long march to suffrage. We can vote out those who seek to quiet our voices, but we can also send a clear warning that we will not stand by and watch as our rights are picked apart. As conservatives gear up for a second round of assaults on voting rights in 2012, it is crucial that women – with all of the power and potential that has been realized in the years since those pioneering heroes – act now by defending that which we fought for and won decades ago.

Cross-posted at MomsRising.org

Follow Cristina Francisco-McGuire on Twitter: @CristinaPSN