New Jersey Policy Perspective Report Shows How AAA Landed $8 Million in Tax Dollars Without Creating a Single Job

Study Drives Home the Need for Region-Wide Cooperation on Economic Development Accountability

HARRISBURG, Pa., July 25 -- Based in Philadelphia since 1901, the headquarters of AAA Mid-Atlantic (AAA) moved to Wilmington, Delaware in 2005. Although only 30 miles from its previous location, AAA cited Wilmington's more central location as a major factor in its decision to move hundreds of good jobs out of Philadelphia.

In its report "Mapping the Route to Dollars: AAA Mid-Atlantic's Four-State Tour" New Jersey Policy Perspective (NJPP) tells the rest of the story behind the move.

By moving its headquarters from Pennsylvania to Delaware, a technology office from Pennsylvania to New Jersey and a call center from Maryland to Delaware, AAA captured $8.1 million in state and local subsidies.

"You have in this one story an illustration of how corporations of all sizes regularly reap huge windfalls by playing state officials off one another," said Mark Price, a labor economist at the Keystone Research Center (KRC). "It really is a race to the bottom, with Philadelphia losing good jobs to Wilmington but only at great expense to Delaware taxpayers. The one clear winner: AAA Mid-Atlantic."

"There is a growing support in the commonwealth of Pennsylvania for subsidy accountability legislation that would rein in some of the worst abuses of the taxpayer," added KRC executive director Stephen Herzenberg. "What this report highlights is the need for multi-state cooperation throughout the Mid-Atlantic, because all of the region's states lose when they play the subsidy game."

The full text of the report, "Mapping the Route to Dollars: AAA Mid-Atlantic's Four-State Tour," is available from the New Jersey Policy Perspective Web site http://www.njpp.org/.

New Jersey Policy Perspective is a nonprofit, nonpartisan organization established in 1997 to conduct research and analysis on state issues.

The Keystone Research Center is a Harrisburg-based research organization and a leading source of independent analysis of Pennsylvania's economy and public policy.