Where are your tax dollars going? Which corporations are receiving the most in Pennsylvania taxpayer-funded subsidies? Learn more about the impacts of these subsidies by reading Welfare State: Corporate Socialism.
10. Aquion Energy = $13 M
Aquion Energy is a Pittsburgh based company that manufactures sodium ion batteries and energy storage systems. Aquion will use state funding to renovate a Westmoreland County factory to site its manufacturing facility. The company claims 400 jobs will be created once it is in full production. Aquion also received a $5 M U.S. Department of Energy Grant.
Aquion joins a long list of failed manufacturers brought to the Westmoreland County plant over the last four decades, including Sony (received at least $40 M), Chrylser and Volkeswagen (received $100 M).
9. The Vanguard Group, Inc. = $15.5 Million
Vanguard is the world’s largest mutual fund company, with about $2 trillion invested in the U.S. in more than 170 index, active, and exchange-traded funds.
Vanguard received incentives through the state’s opportunity grant program and job creation tax credit totaling $15.5 M. It is unknown from these sources how many permanent jobs have been created.
9. How Do You Know Productions, Inc. = 15.8 Million
This was a 2010 film produced by Gracie Films, distributed by Columbia Pictures and filmed in Philadelphia.
According to the Hollywood Reporter, the total production cost of the film was $120 M minus tax breaks both from Pennsylvania and Washington, D.C. The combined salaries of the four major cast members and the director totaled $50 M. The film only grossed about a quarter of the total production costs.
8. Harley Davidson = $19.5 Million
Harley Davidson is an American motorcycle manufacturer which has a manufacturing plant in York County. As of 2009, the plant employed 3200 workers. The company has about $9.7 B in assets and recorded its revenue in 2011 as $5.3 B.
In 2000, Harley Davidson threatened to leave Pennsylvania and the Commonwealth provided the company with $4 M in tax credits. In addition, they received an additional $500 K under Governor Ridge for improvements to their museum and tourism facility.
In 2009, the company once again threatened to leave. Governor Rendell offered up to $25 M in tax credits. The company took advantage of up to $15 M in tax credits and remained in York. Their workforce went from approximately 3200 to about 1,000, as reported by the Wall Street Journal in 2012.
7. Nova Prime, Inc. = $20.5 Million
Pennsylvania native M. Night Shalalam’s latest film entitled After Earth received $20.5 M through Nova Prime, Inc., a California-based company. M. Night Shyamalan, according to a 2012 Watchdog.com article, received over $48 M in Pennsylvania film tax credits.
In 2012, the Philadelphia Inquirer reported that Shalalam lobbied then Governor Rendell and key members of the legislature to preserve the film tax credits which at the time were threatened due to a $3.2 B budget deficit. In 2009, the Patriot-News reported that Shalalam moved his $10 B film production of the 2010 film entitled Devil to Canada due to concerns that the state’s film tax credits would be eliminated.
6. Merk & Co., Inc. = 22.5 Million
Merck Sharp & Dohme, MSD (Merck & Co., Inc.) is one of the largest pharmaceutical companies in the world. Total assets are reported as over $105 B and their 2011 revenues topped $48 B.
In 2011, Merck & Co., Inc. received $19.6 M through the Pennsylvania Research & Development Tax Credit Program and an additional credit of $2.9 M in 2009 and 2010.
This amount does not include the tax abatements and subsidies given to Cherokee Pharmaceuticals LLC, which for a short period of time owned and operated the Riverside, PA Merck Manufacturing Plant from 2008 to 2010. During this time, Cherokee received $6.9 M for Job Creation Tax Credit, Opportunity Grant Program and Job Creation Tax Credit. It is not known whether jobs were created under Cherokee’s ownership of the plant.
5. Delta Airlines = $30 Million
Delta is the second largest airline in the nation and had earned approximately $1.6 B in 2012. Delta’s subsidiary, Monroe Energy LLC, purchased the Trainer Refinery Complex south of Philadelphia for $150 M.
Delta’s subsidiary received $30 M in state assistance for job creation and infrastructure improvements. According to a Delta press release, “Jet fuel production is expected to begin during the third quarter, and changes to the plant infrastructure to increase jet fuel production would be complete by the end of the third quarter, resulting in expected 2012 fuel savings of more than $100 million.”
In 2012, Bizjournals.com reported that Delta would increase its fares, on average, by $10.
4. News Corp = $34.7 Million
News Corporation or News Corp is worth over $60 B and was founded by current CEO, Rupert Murdoch. News Corp’s U.S. holdings include Fox News, The Wall Street Journal and Twentieth Century Fox. The global conglomerate owns all or a portion of 75 newspapers, 33 magazines, 4 publishing companies, 21 film studios, over 100 television channels.
The corporation received $34.7 M, according to the New York Times: United States of Subsidies in film tax credits. According to the 2011 Report to the General Assembly on the Film Production Tax Credit Program, 20th Century Fox received $20.8 M for a 2010 film entitled Unstoppable, filmed in Pittsburgh an another $1.5 M for a Fox television series entitled Locke & Key.
3. Comcast Corporation = $45.6 Million
Comcast Corporation is the nation’s largest cable television and high-speed internet provider, with assets of over $160 B. Comcast holds a 51% controlling interest in NBC Universal.
According to the New York Times Corporate Subsides Database, Comcast has received taxpayer subsidies through the Opportunity Grant Program, Job Creation Tax Credit, Customized Job Training, Research and Development Tax Credit, and Infrastructure Development Program Grant.
According to a Bizjournals.com article, Comcast received $42.8 M in taxpayer funds in 2005, under then Governor Rendell, through the Commonwealth to construct a $435 M complex in Philadelphia. In 2008, according to the Subsidy Tracker, Comcast received an additional $3.6 M in Research & Development Tax Credits.
2. Paramount Pictures (Subsidiary of Viacom)= $63.5 Million
Paramount Pictures is a subsidiary of Viacom, a global mass media corporation, worth over $22 B. Viacom is the world’s 4th largest media conglomerate and in 2012, Viacom’s profits were $3.3 B.
Paramount received Pennsylvania 25% film tax credit, which is given to film companies that spend at least 60 percent of their total production budget in the Commonwealth.
The Center on Budget & Policy Priorities conducted a study entitled State Film Subsidies: Not Much Bang for Too Many Bucks and found that the subsidies: 1) were rewarding companies for something they would probably anyway; 2) are supporting the creation of good-paying jobs but just menial labor; and the economic impact generated by the film industry does not nearly cover the cost of the subsidies.
According to Subsidy Tracker, over $7 B has been divvied out in Film-related tax credits.
1. Royal Dutch Shell = $1.65 Billion
Royal Dutch Shell is the largest oil company in Europe and tops the list of Fortune Global Top 500 companies for the last two years. Shell’s 2012 profits totaled $27B.
Governor Corbett has offered a $1.65 B subsidies package (over a 25-year period) to Shell to build an ethane cracker plant in Western Pennsylvania. There are wide speculation on the numbers of jobs that will be created. Some will be permanent, some will be temporary, some will be indirectly created. 400-600 permanent jobs are expected to be created at the factory. A natural gas industry-funded report predicts up to 20,000 new jobs; however, according to a NPR’s Sate Impact Pennsylvania article, these number are much harder to estimate and track.
Sources: New York Times: United States of Subsidies; Subsidy Tracker
Notes: The New York Times data only includes state, county and local expenditures and does not take into account federal dollars directly allocated. The Subsidy Tracker data is based on data provided by PA state agencies as of September 2012.
This piece attempts to track monies processed through parent corporations and subsidiaries, based on the source data indicated and additional research; the author attempts to be as accurate as possible despite the lack of transparency in corporate governance of subsidiaries and the limitations of the source data.