Clawback Provision
Definition
A contract clause that allows government to recover tax incentives or grants if a company fails to meet promised job creation, wage levels, or other commitments. Protects taxpayers from corporate promises that aren’t kept.
Louisville Context
Louisville has given away millions in tax breaks to companies that later failed to deliver promised jobs or closed facilities entirely—with no way to recover the incentives. Dave’s plan makes clawbacks standard in all economic development deals: miss job targets by more than 10%? Repay proportional incentives. Close facility within 5 years? Repay all incentives. Pay below promised wages? Forfeit future tax breaks.
Why It Matters
Without clawbacks, companies have zero accountability after getting tax breaks. They can promise 500 jobs, deliver 100, and keep all the incentives. Clawbacks ensure companies keep their promises or pay back taxpayers.
Dave’s Proposal
Require clawback provisions in all economic development agreements over $100,000. Companies that fail to meet commitments must repay incentives proportional to shortfall.