Solution for Good Government: Recover millions in government subsidies to the private sector by including “clawback” provisions.Submitted by kallos on Sun, 02/05/2012 - 1:01pm
New York City spends millions of dollars a year in subsidies to companies which promise to create jobs and increase economic development. Sometimes, however, few or no jobs are created, or the company leaves the City without repayment. For example, in 2004 Pfizer was granted $10 million in tax breaks in return for increasing employment at its Brooklyn plant. Just three year later and after collecting all of the money Pfizer closed the plant and left the tax payers holding the bag. Minneapolis currently requires that companies that fail to live up to their job creation requirement must repay the funds it received plus pay an additional penalty. Putting similar “clawback” provisions and rules on all new subsidies to the private sector will allow us to recover these valuable tax payer dollars where they fail to create jobs they promised or violate their agreement in bad faith.