The massive scale of the corporate welfare state in America is such that we are no longer shocked. Subsidies are often given in the name of job creation, but in New Mexico large scale corporate welfare has had a bad track record, as Eclipse, Mesa del Sol, and other projects have gone sour, and as word leaked out that subsidies to the film industry were being badly abused. Subsidy Tracker version 3.0, software from Good Jobs First, has updated its data base, assembling records of over 160,000 awards doled out from 137 federal programs. To download the tracker, click here. For a pdf copy of its latest findings, click here. The software allows you to track subsidies to corporations, broken down by state, time period, size of subsidy, company name, and many other variables. For the first time the tracker names names and dates. A guidebook to using the data base can be found here.
First Glance Key findings: Still shocking but no longer surprising
1. Corporate welfare tends to go to large corporations. Out of $68 billion in federal grants and allocated tax credits, almost $46 billion (67%) went to a group of 586 large companies. Of these, 21 firms received half a billion or more, and six received over $1 billion.
2. As we have learned from other sources, the huge banks got most of the bailout money after 2008. In the Trillion dollar club we have four mega-banks, including Bank of America ($3.5 trillion), Citigroup ($2.6 trillion), Morgan Stanley ($2.1 trillion) and JP Morgan Chase ($1.3 trillion). A dozen foreign and domestic banks slurped up 78% of the face value of loans, loan guarantees, and bailout assistance. Twenty seven of the largest 50 bailout recipients were foreign banks.
3. Many large federal contractors also receive corporate welfare checks of one kind or another. Forty nine of the largest 100 federal contractors in FY 2014 have received loans, loan guarantees, or bailout assistance in addition to their contracts.
4. Several of the top bailout recipients have paid hundreds of millions to regulators to settle allegations of such things as investor deception, facilitation of tax evasion by clients, and sanctions violations.
New Mexico: see also here from Subsidy Tracker
Intel in New Mexico has gotten over $2.5 billion in state and local subsidies since 2000. This is almost half the total amount of state and local subsidies Intel receives from the five major states it operates in, surpassed only by Oregon. In spite of the New Mexico subsidies Intel expended its plant in Chandler, Arizona (not Albuquerque), where subsidies are only about $82 million.
Forest City Enterprises, from Cleveland, Ohio, is second, with subsidies of half a billion in state land to develop Mesa del Sol, thanks to the TIDD program. Forest City has recently been trying to sell its share of the project.
Third is Schott, a German solar company, at $132 million, part of the Mesa del Sol project. In 2012 the plant closed down, leaving the state stuck for $16 million in taxpayer money.
Lions Gate Entertainment, at $99 million, mostly in grants and low-cost loans. New Mexico has subsidized Lions Gate more than any other state. New Mexico was paying back 25% of local expenses to out-of-state film, with no accountability.
Eclipse Aeroscape got over $99 million in New Mexico before going bankrupt.
Official New Mexico has little experience with entrepreneurship and the track record, not auspicious, suggests there is more politics in the concoction of these schemes than hard-headed business analysis.
The creation of a first-rate education system in New Mexico, a long-term project, would do more to attract business and produce jobs than another few billion spent on these high profile, low-return projects.
For other sources of information along these lines, see Influence Explorer