And more praise and criticism came from Professor Kenneth Thomas, an author of two books on corporate subsidies, who was interviewed (but not quoted) by the Times. In a pair of blog posts, Thomas praised the series for creating “substantial buzz about the issue of economic development subsidies,” and lauded the paper “for compiling a great database of programs all in one place.”
But, Thomas added, tax exemptions for business services should be thought of as “methods to avoid tax cascading… and not a subsidy at all.” And the Times’s “interpretation of the sales tax breaks, which are 5/8 of the national total but largely not subsidies, confuses the issue of total impact on state and local budgets and makes statistical analysis premature.” (For a more particular complaint about the paper’s characterization of the impact of a subsidy on a local budget, which the Times disputes, see here.)
As these commentators acknowledged, people can disagree about what counts as a “subsidy.” And the Times does have some support for its decision. Purdy wrote to me via email that “Michigan’s in-house tax expert, who is also a professor, advised Louise to include sales tax figures that he said reflected subsidies to businesses.” Also, after the Times series kicked off a debate on this very question in West Virginia, a policy analyst at a left-leaning think tank there weighed the issue and concluded, “the [sales tax] exemption meets all the definition of a tax incentive.”
Still, the Times’s decision to include the sales tax exemptions was at odds with leading authorities on this subject—and worse, lay readers and most journalists would come away from the series not even knowing of the debate. A news organization does not have to report in conformance with orthodoxy. But journalists should be aware of orthodoxy, be ready to explain it, and also explain the reasons a different perspective adds valuable insights.
$100 million, and more
The paper emphasized in the series itself and in communication with me that its numbers were not comprehensive. Journalists who hope to build off the paper’s work should take that disclaimer seriously.
This point can be seen most clearly in the user-friendly database accompanying the series, which was compiled by blending the Times’s original reporting with several existing data sources. (The online Subsidy Tracker from Good Jobs First accounted for some 98 percent of the individual company awards, and a smaller share of the money awarded, in the Times’s database.) One feature of the database is the “$100 Million Club”—the 48 companies the Times identified that received at least $100 million in state grants since 2007.
The listed subsidies add up to $1.76 billion. But even given the Times’s acknowledgment that its data was not comprehensive, it was striking that the list left out major projects which dwarfed those that were included. Phil Mattera of Good Jobs First made this point in a blog post:
For example, the Times lists a total of $338 million for Boeing, including $218 [million] from South Carolina. Yet it has been estimated that the package Boeing got by locating a new Dreamliner assembly line in the Charleston area could be worth some $900 million.
Apple is said to have received a total of $119 million, yet the Times fails to include more than $60 million in subsidies the company got for a data center in North Carolina.
The Times $100 Million Club also misses some major recipients entirely, including Volkswagen, which got more than $500 million in connection with an assembly plant in Tennessee, and ThyssenKrupp, which got more than $1 billion in subsidies for a steel mill in Alabama.
And these only include deals dating back to 2007, which is the period the Times used in compiling its $100 Million Club. The larger Times database seriously understates the size of major deals that took place earlier. For example, it lists only $19.3 million for GlobalFoundries in New York State, even though the company took over a $1.2 billion deal originally offered to Advanced Micro Devices (which isn’t listed at all).
For various reasons, most of these awards aren’t yet in the Good Jobs First database, either. (Purdy of the Times wrote via email that the Subsidy Tracker “data only made up 44.1 percent of the dollar value in the $100 Million Club.”) And accounting for these subsidies would not have changed the Times’s $80 billion annual figure, which was derived from state government program costs and not company-specific incentives.