Posted by:
Steve Dubb
Good Jobs First study identifies Citibank as "corporate welfare" recipient
A recent study conducted by Good Jobs First finds that the state of New Jersey has provided $94.3 million in two 10-year state Business Employment Incentive Program (BEIP) grants to encourage Citigroup to hire or relocate 3,350 people to offices in Warren Township and Jersey City.
Simple math indicates that for each job, the state of New Jersey is compensating Citibank to the tune of $28,000. And that assumes that Citibank matches its job projections: to date, according to the study authors, Citibank “has added jobs at a rate well below what it projected when applying for subsidies.”
While the incentives are for “new” jobs, the jobs coming to Warren are not new to the company. Instead, most of the jobs are positions being relocated from other Citibank locations, mainly in New York State.
Citibank doesn’t just receive subsidies from the state of New Jersey. According to the study’s authors, between 1989 and 2007, Citibank has received $125.5 million in state and local subsidies from New York State, $46.7 million from Kentucky, and $12.6 million from Texas. But Citibank is not unique in taking advantage of creating bidding wars among states to obtain state economic development dollars that might better be spent on genuine local job creation.
Indeed, the subsidy Citibank received to relocate some of its jobs to New Jersey is dwarfed by the subsidy received by another large financial company, Goldman Sachs, which received a $164 million BEIP payment from the state of New Jersey in 2000.