Tax breaks to corporations in exchange for jobs are often modified — in secret — after the fact, a new study finds.
Governing magazine reports that the University of Texas at Austin studied 165 awards given out by the Texas Enterprise Fund, which manages such corporate incentives for the state. In 46 of those cases — about a quarter — the fund changed contracts after they had been finalized. In most cases, the changes were favorable to the company, lowering the number of jobs required to get the tax breaks, or changing the schedule for meeting those requirements. And many times, Governing says, the changes happened right before a company would be subject to provisions requiring it to pay back the incentives it received for not creating those jobs.
There might be more amended deals than included in the study, as many companies challenged UT Austin’s public-records requests during its research. “This finding, from a single state, is troubling,” Nathan Jensen, the study’s co-author, told Governing. “If companies can not only secretly renegotiate the rules, they can also make sure that public records laws shield them from revealing these renegotiations.”
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NEXT CITY
by RACHEL KAUFMAN
MARCH 7, 2019