Early reports indicate that lawmakers have a deal to complete the state budget, and that it will include an end to the state’s largest business subsidy program. The state currently earmarks $500 million of the corporate income tax to the Strategic Outreach and Attraction Reserve, which writes big checks to big companies. That earmark would end under the reported budget deal.
It’s a good move. The SOAR program is a waste of money. Lawmakers used the program to propose nine deals that offered $1.45 billion to create 14,779 jobs. However, $720 million has been spent and no jobs have been created, according to the latest state report.
Nor should lawmakers expect that deals deliver on their promises. The major deals that the lawmakers made from 2000 to 2020 produced just 9% of the jobs that were promised. Handing out taxpayer cash to land the next big factory produces more headlines than results. And the states that are growing the most don’t rely on corporate welfare to drive their job growth.
The money could be used for other priorities, like roads and schools, though people will have to wait for the budget to be approved to see how.
The program will still exist in statute. Perhaps lawmakers will authorize more funds for it in the future. But lawmakers will no longer be replenishing the funds, and that’s a step in the right direction.
