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After years of local and state politicians doling out billions in tax incentive packages to private companies, those leaders’ governments are suddenly faced with critical budget deficits as revenues dry up.
States, counties and cities have spent upward of $95B a year on corporate incentives and subsidies by some estimates. But despite the holes those incentives leave in municipal budgets, and an increasing nationwide pushback against them, politicians aren’t likely to stop offering tax breaks to private companies as they try to lead the recovery from a deep economic recession.
“I think that as local residents demand a faster local economic recovery, the way the politicians are going to respond is by offering a signal to their voters that they're trying to do something. The clear signal politicians typically offer is by offering subsidies,” said Michael Farren, a research fellow…
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