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The Washington Post has a story about how urban development expert Richard Florida, a professor at the University of Toronto and author of a book that promotes the value of high-paying tech jobs to communities, is joining with a number of colleagues to discourage the use of tax subsidies to attract Amazon when it chooses a location for its second North American headquarters.

According to the story, “Just over a week after Amazon announced finalists, the company began issuing detailed requests for information on workforce, education, transportation, zoning and culture from jurisdictions still in the running, according to officials familiar with the process who spoke on the condition of anonymity because they signed nondisclosure agreements. One official said there were more than 200 questions that would require weeks to answer.”

The Post writes that “Florida said he admires Amazon as a company and believes some incentives for tech jobs can be a good idea. But
he said research suggests that offering big subsidies to large companies rarely drives economic growth, and Florida worries that a new precedent is being set, one in which public officials feel obliged to hand over increasingly larger magnitudes of money to corporations.” The Post reports that there has been significant research to suggest tax incentives often are “wasteful and counterproductive,” and sometimes “divert funds that could be put to better use underwriting public services such as schools, housing programs, job training, and transportation, which are more effective ways to spur economic development.”

And so, “Florida is rallying academics and others to join the cause, arguing that governors and mayors should rethink offering billions in taxpayer dollars.” They are “urging governors and mayors to join a ‘Non-Aggression Pact’ against offering huge taxpayer subsidies.”

The story notes that “Maryland Gov. Larry Hogan (R) has proposed $5 billion in incentives, while New Jersey has offered a reported $7 billion subsidy deal to bring the company to Newark. Other cities and states have yet to make public their bids; they could be offering even more.”
KC's View:
I’m sympathetic to this effort, though the problem is that I suspect it only will be successful if all 20 finalists sign on. I don’t know enough about urban development to make a complex argument here, but it would be nice if any incentives somehow were staggered so that the better the final HQ2 does over the long haul, the better Amazon would do - it would make Amazon not just the beneficiary of community largesse, but an actual member of the community.

My first thought was about cities that spent billions of dollars on sports facilities, but saw limited return from their existence. I don’t think this is apples-to-apples, but I do think that communities have to have their priorities straight.