Help us take the next step in the fight for economic development transparency, accountability and reform.
State and local politicians across the United States hand out enough money to businesses in special “economic development” incentive deals each year to fund the 10 smallest state budgets, combined.
That's more than $70 billion per year in wasteful and ineffective corporate welfare that could have been used for essential public services such as police & fire departments, roads, utilities or schools -- or been returned to individual and small-business taxpayers.
We're dedicated to taking on this toxic alliance of big business and big government, but we can't do it alone.
Your donation - doubled by a matching grant - will play a critical early role in helping us create an environment for economic development transparency, accountability and reform.
WHO WE ARE
We're The Center for Economic Accountability. We're a relatively new nonprofit organization that was founded to fight for transparency, accountability and reform in state and local economic development programs across the country. (Learn more about us here.)
We're nonpartisan. Our leadership are experienced professionals and advocates who come from a limited-government, free-market background, but as The Guardian quoted our president, "this is something that the principled left and principled right can agree on." We work closely with state and local community advocates, elected officials and policy organizations from across the political spectrum who begin from different principles but end up sharing our practical goals.
We're connected. We work with leading university professors and other respected researchers to digest the academic studies on this topic and ensure that our advocacy is based on facts and research. Even as a new organization, we've been invited to participate in high-level policy discussions and strategy sessions and asked to speak to both consumer and professional audiences across the country. State and local think tanks and other advocates are already requesting our assistance in making the case against bad deals in their communities.
We're working for transparency and accountability. As long as the average person believes the party line that these programs "create jobs," state and local advocates will face an uphill battle in trying to get meaningful policy reforms. That's why we're focused in the short term on educating communities and elected officials on the need for more transparency and accountability in these programs. We believe that once their books are opened to public inspection, even the most hardened skeptics will have to admit that it's time for a change.
We're necessary. There are more than 540 well-funded public organizations across the country where bureaucrats work to expand these programs. They're supported by politicians who benefit on Election Day when they take credit with voters for "creating jobs," and businesses that love free money from taxpayers. Acting virtually unopposed, these self-interested stakeholders have more than tripled the amount of money state and local governments hand out in economic development deals since just 1990. Without principled and effective opposition from advocates such as the CEA, that burden on our communities will continue to grow unchecked.
WHY THIS MATTERS
Every day, city and state governments make deals that impose very real costs on their taxpayers and on the people who depend on those governments to provide vital public services. The money they hand out could be better used elsewhere in a budget - or not taken from taxpayers in the first place.
Some real world examples include:
• Detroit, MI - home of the nation's largest municipal bankruptcy - spent more money to acquire land that it gave for free to Fiat Chrysler as part of a subsidy package than the city spends to operate its Health Department for a year.
• Tucson, AZ politicians' plans to expand a single tax credit program would cost more than the city spends to operate its network of public swimming pools, in a desert region that averages 90-degree temperatures for five months out of the year.
• Portland, ME loses more money each year to economic development tax credits than it spends on its public libraries.
• Iowa's tax credit programs are so expensive that the taxes they don't collect could fund all state and local government spending on mental health and disability services each year.
And if these deals actually did what they claimed they'd do, then this would be a different discussion. But the research-backed evidence proves they don't. The hard truth is that economic development incentives:
• Don’t create jobs
• Don’t grow economies
• Harm states’ long-term fiscal health
• Don’t encourage innovation
• Don’t encourage entrepreneurship or business creation
• Artificially increase economic inequality
• Do encourage lobbying and political donations
• Create opportunities for corruption
• Crowd out public services in budgets
They simply don't work.
As internationally-recognized urban policy expert Richard Florida writes, "There is virtually no association between economic development incentives and any measure of economic performance. We found no statistically significant association between economic development incentives per capita and average wages or incomes; none between incentives and college grads or knowledge workers; and none between incentives and the state unemployment rate."
In short, economic development deals impose real costs while failing to deliver their promised benefits. That's what we're working to change.
WHAT WE'VE ACCOMPLISHED SO FAR
As educators and advocates focused on helping people understand the costs these programs impose on their communities, one of our first priorities was to start getting our message into the media. We wanted to ensure that there was an audience for what we had to say, and we wanted the feedback we'd receive to help improve our messaging and make it more effective.
Especially for a new organization, we've had tremendous success in our media outreach efforts. Over the past few months, we've had columns run or been interviewed by reporters for stories in media outlets in Colorado, Illinois, Indiana, Iowa, Maine, Michigan, New York and Tennessee. (See here for links and more information.)
Our president has spoken to more than a half-dozen consumer and professional groups in Indiana, Iowa and Michigan, as well as hosted a national webinar sponsored by the Center for the Study of Liberty.
We've engaged with academics and researchers at more than 15 different institutions, including tenured professors and department chairs at some of the nation's best-known public universities. Whenever possible, we interact directly with the people advancing the state of the art in research on economic development outcomes to ensure that our work is based firmly on hard facts and can withstand attacks from the economic development industry's hired guns.
We've done all this on a shoestring budget and pro-bono staff. We've demonstrated that we can execute on our plans and that there's demand for our work; it's time to take the next step. That's where you come in.
WHAT YOUR DONATION SUPPORTS
Thanks to a generous matching grant from the Atlas Network, your contributions to this campaign will be matched on a dollar-for-dollar basis, up to $5,000. This is a rare opportunity to double the good your donation will do.
In the first half of 2019, our leadership self-funded the CEA's activities and donated their time to test the CEA's strategic model and demonstrate demand for our messaging and advocacy. We've reached the limit of how much we can accomplish through that limited model, and that's why we're asking for your support.
Your donation, along with the Atlas Network matching grant, will help us make critical organizational investments and take advantage of opportunities to make a difference in the near term, while our legal structure and more comprehensive fundraising efforts catch up to our operational pace.
The CEA filed our application for 501(c)(3) charitable status with the IRS in April 2019. It may well be almost the end of the year before we hear back, but if we wait that long to start investing in building capabilities then we risk wasting a critical moment in public opinion. We've got a lot of work to do, and no time to waste.
In practical terms, your donation lets us advance as an organization by providing the resources to do important things we couldn't afford to do otherwise. This ranges from covering travel expenses to fulfill speaking requests to acquiring the software we need to run our operations, to compensating professionals to help us with things like graphic design, video production, web design, interactive development, public opinion research and more. It lets us pay for practical things we need like insurance and website hosting and research database access.
Importantly, your support also demonstrates to foundations and other philanthropic donors whom we're asking for support that our work matters to people like you. It shows that there's a constituency for reforms that put people and principles, not politics, at the heart of economic development policy. It's tangible evidence that you care about what's going on in your community and value our efforts to make its future more free, fair and inclusive.
In the end, what you're supporting is a better future for our communities and our country. No matter what your politics or background might be, we can all work together toward a goal like that.
Thank you for your consideration, and we promise that we'll be just as efficient and effective with your donation as when all the money was coming out of our own wallets. We hope you'll join us and help spread the word.
To learn more about our work and what we've accomplished to date, visit our website at www.EconomicAccountability.org, or follow us on Twitter @AccountableEcon or on Facebook.
Have a question we haven't answered here? Feel free to contact us .
“Exposing the weakness of rent-seekers’ claims and the naked self-interest behind them is not rocket science, but finding opportunities to do so requires someone to be constantly, carefully building a case and looking out for opportunities.”
-- Brink Lindsey & Steven M. Teles, in The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality (2019)