The Hidden World of Corporate Subsidies

Transparency and job creation receive great gusts of political lip service. Just not at the same time. Programs for job creation—each state's unique mix of tax breaks and other inducements to new business—are among the least transparent parts of state government, according to a recent report by Good Jobs First. The D.C.-based watchdog looked at economic-development efforts in all 50 states, a total of 245 initiatives worth more than $10 billion. What it found would make an open-government activist cringe: most states fail to disclose the details of at least one key subsidy program—and 13 states are entirely dark on the subject. That prevents people from evaluating corporate-welfare programs, even as politicians tout their benefits.

One bright spot was Illinois, which requires reports on every subsidy it doles out. But the smoke-filled rooms may be multiplying. At least six states have privatized part of their corporate-recruiting efforts in recent years. Business leaders speak the same language, the thinking goes. But without better transparency, public-policy experts argue, the same pockets might get lined as well.