Image credit: GoodStudio / Shutterstock
Last year, a group of organizers, activists, and community members in Camden, New Jersey, called Camden We Choose successfully pushed into law a new requirement that Camden-based corporations disclose twice annually how many of their employees are actually based in the city.
The goal was to see if the corporations that have scooped up gobs of subsidies from the city and state—about $1.5 billion from the state alone, under programs that were engineered to give special preference to corporations that moved to Camden—were providing jobs to the people who actually lived there, in one of the poorest cities in the region, if not the country.
Well, the disclosures are in, and the answer is a resounding no. The numbers reflect not just a massive policy failure for New Jersey and Camden but are a giant red warning light about any form of corporate subsidy.
Under New Jersey law, as I wrote last year, about 20 percent of municipalities are governed by what’s called the Faulkner Act, which allows petitioners to force a city council to consider and approve a new ordinance if they collect enough valid signatures. If the council doesn’t meet the petitioners’ demands in some form or fashion, the proposed law goes before voters for a referendum.
After enough signatures were gathered in favor of the new disclosure regime, the Camden council adopted a version of it late last year. Camden-based corporations were slow to start their reporting and received an extension from the city on the first round, but now the early results are in.
I went through the disclosures, and here’s what they show about the corporate heavyweights that received large subsidy packages for moves to Camden.
NFI, LP, which received about $80 million in 2014: Nine Camden residents out of 524 employees.
Lockheed Martin, which received about $107 million in 2014: Three Camden residents out of 229 employees.
EMR Metal and Recycling, which received about $253 million in 2015: 186 Camden residents out of 648 employees
Holtec International, which received $260 million in 2014: 37 Camden residents out of 1,623 employees.
Conner Strong & Buckelew Companies, LLC, founded by New Jersey power broker George Norcross, and which received about $86 million in 2017: Six Camden residents out of 402 employees.
American Water Works, which received about $164 million in 2015: Seven Camden residents out of 584 employees.
That’s a lot of money going out the door and not a lot to show for it for Camden.
But the poster child for bad dealmaking may be Subaru, which in 2018 received about $120 million in state tax breaks, plus local property tax exemptions that last 20 years, to move its headquarters a whole whopping four miles from Cherry Hills, New Jersey, to Camden. The state tax break package covered basically the entire cost of the new facility.
“We had other opportunities. We could have gone other places, and we chose this city because it fits in with what we’re trying to do as a company,” said Tom Doll, president of Subaru of America, when the facility opened. “Our job is not just to take. We want to be able to give back.”
Not so much, it turns out.
Subaru’s resident disclosure is really a thing to behold. After nearly five pages of peans to Subaru’s greatness for the community—including sections entitled, I am not kidding you, “Subaru loves learning” and “Subaru loves pets”—it lays out these numbers.
Ten. Out of 786 employees. Plus another 33 contractors, who are paid who knows how much and treated who knows how badly. Paid for with 20 years of property tax breaks, on top of a more than $100 million state subsidy package.
Honestly, the total isn’t surprising considering how small a distance Subaru moved this facility. It wasn’t going to replace a whole workforce after going just four miles. 750 people just had to alter their commutes. Those workers are paying their property taxes somewhere else, likely doing their shopping somewhere else, and making any other sort of local investment, be it with money or time, somewhere else.
There’s simply no way the math on this works out in Camden’s, or the state’s, favor.
“Giving giant tax incentives to large corporations in the vague hope that they hire your residents is not good policy,” said Sue Altman, executive director of New Jersey Working Families Alliance. “This isn’t just a test case for New Jersey and for Camden. This should be a test case for the country.”
There are three takeaways from this that I can see. The first is that these disclosures are more proof that the corrupt corporate subsidies flowing to Camden-based corporations aren’t actually doing anything for the residents there. I’ve written before about how the programs that were designed with boosting Camden as the ostensible goal were intentionally corrupted to serve corporate executives and political insiders not residents: Now we have the data backing up what everyone suspected.
Second, this shows that corporate subsidy deals, if they must exist at all, absolutely have to have binding local hiring requirements, and those requirements have to be enforced. Otherwise, one of the chief supposed benefits of these deals just goes begging. There’s often a lot of resistance or chicanery around local hiring requirements, but they’re critical (again, assuming we’re not living in my preferred world where this sort of dealmaking simply ceases to exist).
Third and finally, disclosure can be a powerful tool for uncovering exactly how flawed particular subsidy deals really are. We never would have known how few local residents these heavily subsidized corporations were hiring without a committed group of activists using the available legal tools to implement a new disclosure regime.
So kudos to them, and boo to the folks who pushed through these “deals” on behalf of Camden, but really on behalf of themselves and their cronies.
This post originally appeared in slightly different form on the author’s Substack, Boondoggle.
Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, the Boondoggle Newsletter, and the director of state and local policy at the American Economic Liberties Project.