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Money down the Drain

How San Jose Is Fighting Back Against Corporate Welfare

Oct 13, 2017 by AFP

As cities and states across the country work to attract new companies to their communities with generous corporate subsidies, San Jose Mayor Sam Liccardo is taking a different approach., a company that’s been revolutionizing the global economy, is looking for another city to call a home base. But San Jose isn’t buying what Amazon is selling.

While Amazon’s search for another corporate headquarters has generated tons of headlines, potentially pitting city against city, Mayor Liccardo recently made a bold announcement:  San Jose will not offer any subsidies to attract Amazon’s new headquarters.

Wait, what?

In his recent op-ed in the Wall Street Journal, Liccardo highlights a multitude of reasons to oppose corporate subsidies, referring to them as “a bad deal for taxpayers.” 

With many subsidies, the jobs a company brings to an area don’t generate revenues commensurate with public expenditures.

The GE deal will cost taxpayers more than $181,000 for every job created in Boston.  

Most experts insist that other factors—particularly the presence of a skilled workforce—play a far-larger role in determining boardrooms’ corporate location decisions. Moreover, some 95% of Silicon Valley’s job growth comes from new small-business formation and instances when those homegrown companies develop into larger firms.

Liccardo believes that communities should focus on developing talent locally and should “focus on building the workforce first – investing in human capital, enacting startup-friendly policies and joining with local universities and workforce training programs.”

The San Jose mayor also noted that cities and states should pursue policies that improve the business climate, rather than use taxpayers’ hard-earned dollars to bribe businesses into relocating.

He’s right: it’s not fair for taxpayers to shoulder the burden of paying for political favors.   

By implementing pro-growth policies that eliminate red tape and encourage economic growth, cities like San Jose can create an environment where businesses are vying to set up shop – without bribes from taxpayers. 

In a strong economy, workers are in control. They call the shots, and businesses work to attract the best of them. That’s the best way to build a thriving city.

Let’s stop asking what special treatment we should give companies, and start asking companies what they’ll do to hire our best and brightest!

Read the full article here.