Finance

Group Ranks How Well States Disclose Economic Development Subsidies

Some states lag far behind others in disclosing information online, according to a new report that reviews 246 subsidy programs in all 50 states and the District of Columbia.
by | January 29, 2014
Wikimedia Commons/ selbstfotografiert
 

Assessing whether or not economic development subsidies are paying off requires examining a range of information, including lists of companies receiving money and payroll data to evaluate whether they’ve kept commitments. In several states, though, this crucial data isn’t yet publicly available online.

A report published this morning by watchdog group Good Jobs First (GJF) reviews 246 subsidy programs in all 50 states and the District of Columbia, finding some states lag far behind others in disclosing information online.

"For most deals, taxpayers cannot even begin to weigh costs versus benefits for the tens of billions of dollars states spend in the name of jobs," the report states.

All states – with the exception of Arkansas, Delaware, Idaho and Kansas – have established some form of disclosure for their programs. But just how much information they publish online varies greatly. A few maintain easy-to-navigate portals, while others merely post PDF documents with limited information.

Illinois topped the rankings, earning an average score of 65 out of 100 points for its various programs. The state recently re-launched its Grant Tracker web portal, featuring a searchable database of awards and maps. Along with award amounts, the site lists recipients’ job counts, occupational categories and average salaries.

GJF rated transparency efforts by reviewing the availability of award amounts, status, reported jobs, wages, project information and company information, along with website features. Some of the more common economic development subsidies included in the report were corporate income tax credits, grants, enterprise zones and sales tax exemptions.

After Illinois, Michigan (58) and North Carolina (48) received the highest marks (see complete list below). The group found no correlation between transparency scores and either job subsidy spending or party control of state legislatures.

One major problem area GJF identified was jobs reporting – a necessary component in assessing whether subsidies are paying off. Of the 246 programs GJF examined, only 59 (roughly a quarter) disclosed figures for jobs created or workers trained.

“Our concern is about the gaps in the reporting on outcomes,” said Philip Mattera, the report’s primary author. “There’s such a small number of states that have good job and wage reporting.”

In most cases, state agencies require companies receiving incentive awards to report job numbers.

Mattera also said states tend to do a better job posting grant disclosures than tax credits. Only about half of the reviewed film tax credits – often a source of public scrutiny – had been posted online, for example.

State economic development agencies typically report grant information, while revenue departments are mostly responsible for reporting tax credits separately.

In addition to posting the data itself, GJF advocates that states post subsidy disclosures in manner that’s easy to access and download. If subsidy data is posted as PDF documents (instead of downloadable spreadsheets) or buried on little-known web pages, it’s not going to be easy to track down. The report hit Georgia with a penalty, for example, because the state Department of Economic Development purges information online after just 30 days.

By and large, though, states are improving their transparency efforts.

Since the group’s last study in 2010, the District of Columbia, Georgia, Massachusetts, Mississippi, Nevada, New Mexico, Oregon, South Carolina, Tennessee and Wyoming all began disclosing economic development information online. In 2007, only 23 states had some form of online disclosure.

The report identified Oregon, which did not maintain a website in 2010, as the most improved state.

Years ago, Mattera said, companies cited privacy concerns and argued publicizing subsidy information could risk divulging proprietary information. These claims have lost merit, though, as states continue disclosing more information online. “That argument just doesn’t go over the way it used to,” Mattera said.

State Online Transparency Scores

The following table lists average transparency scores for all tax incentive programs Good Jobs First examined in each state. For the methodology and list of state programs, please refer to the report.

Source: Good Jobs First, "Show Us the Subsidized Jobs"

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from Finance