When It Comes to Tax Incentives, How Transparent Is Your City?

A new report highlights major holes in local governments' online disclosure of how economic development dollars are spent.
by | March 13, 2017
Austin is the most transparent city overall, according to the report. (FlickrCC/nateClicks)

When it comes to tax breaks for economic development, following the money has never been easy.

Thanks to new accounting rules, states and localities have to disclose how much revenue they lose to such deals. But a new report finds that most of the nation’s largest local governments fail to reveal other basic information online, like what companies are benefiting, how much money they receive or whether they deliver on promises to create jobs.

The Washington-based watchdog group, Good Jobs First, reviewed disclosure practices for 50 of the largest cities and counties and assigned scores based on how much information was made available on public websites.

Just 35 of the 85 economic development programs identified the companies receiving incentives, while only 19 listed dollar amounts paid to or claimed by businesses.

Researchers also assessed programs’ disclosure of jobs and wage data -- a crucial component in evaluating the return on investment. Only 21 of the 85 programs reported numbers of pledged jobs, while 18 disclosed actual jobs created. Even fewer local governments reported wage data for recipient companies.

Meanwhile, 27 jurisdictions -- just over half of those reviewed -- failed to disclose basic information about any of their incentive programs. These local governments, listed below, include some of the nation’s most populous cities and counties. Another five cities published incentive data for only one of two economic development programs reviewed.

Compared to state governments, large localities have made significantly less progress in promoting online transparency. Good Jobs First’s 2014 scorecard assessing state incentive programs found nearly all of them -- 46 states -- met basic transparency standards.

The group last examined online disclosure of local economic development incentives in 2013. The new report card suggests marginal improvements, with 41 percent of programs meeting basic transparency standards -- up from 33 percent.

New York City’s Industrial Incentive Program was the only one that earned a perfect transparency rating. New York’s counties, including Nassau and Suffolk, similarly received relatively high scores, which Good Jobs First attributed to the state’s strong disclosure practices for locally administered programs.

However, the report singled out Austin as the most transparent city overall. Its economic development department manages a detailed database that includes links to city ordinances authorizing incentives, company compliance reports and other documentation.

The release of the report comes at a time when governments are preparing to begin disclosing long-sought-after data around incentive programs in their annual financial reports. The Governmental Accounting Standards Board recently adopted a rule mandating reporting of aggregate economic development program costs. However, the rule doesn’t require disclosure of totals specific to individual deals or more detailed information.

Of course, not posting economic development information online doesn’t mean it’s off limits to the public. Citizens might find information disclosed in city council meeting minutes, or they could obtain it via public records requests.

But the Good Jobs First report argues that citizens shouldn’t have to do that much digging to see how their taxpayer dollars are spent.

“Although freedom of information requests remain important tools in obtaining public data, we believe that public expectations of government data in the digital age require governments to post deal-specific information about subsidy programs online,” the report states.

Economic Development Programs Without Online Disclosure

Thirty-two of the 50 jurisdictions included in the Good Jobs First report did not disclose any information online for at least one economic development program reviewed. 

Locality Program 1 Program 2
Allegheny County, PA Tax Increment Financing Local Economic Revitalization Tax Assistance (LERTA)
Bexar County, TX Innovation Fund Tax Abatements
Boston, MA Tax Increment Financing  
Broward County, FL Job Growth Incentive Local Qualified Target Industries match
Charlotte, NC Tax Increment Grants Business Investment Grant
Columbus, OH Downtown Office Incentives Tax Increment Financing
Cook County, IL Class 6(b) - Property Tax Incentives for industrial purposes Class 7(a)/(b) - Property Tax Incentives for Commercial Purposes
Dallas (City), TX Tax Abatements (Chapter 312) Business Development Chapter 380 Grants
El Paso (City), TX Tax abatement (Chapter 312) Chapter 380
Fairfax County, VA BPOL Tax Exemption  
Harris County, TX Tax Abatement  
Hillsborough County, FL Targeted Redevelopment Program Ad Valorem Tax Exemption
Houston, TX Tax Increment Reinvestment Zones  
Indianapolis, IN Real Property Tax Abatement Personal Property Tax Abatement
Jacksonville, FL Tax Increment District Infrastructure Development (TID)/ Community Redevelopment Areas (CRAs)  
Las Vegas, NV Tax Increment Finance  
Los Angeles County, CA Personal Property Tax Exemption  
Los Angeles (City), CA Small and New Business Tax Exemption Entertainment and Multimedia Business Tax Limitations / Film Industry Incentives
Miami-Dade-County, FL Targeted Jobs Incentive Fund  
Montgomery County, MD New Jobs Tax Credit/Enhanced New Jobs Tax Credit Enterprise Zone Tax Credit
New York City, NY Industrial and Commercial Abatement Program (ICAP)/Industrial Commercial Incentive Program  
Oklahoma, OK Tax Increment Finance  
Orange County, FL Community Redevelopment Areas Property Tax Exemption for Economic Development
Philadelphia (City), PA Job Creation Tax Credit Ten Year Tax Abatement
Portland, OR Multiple-Unit Limited Tax Exemption  
Riverside County, CA Film Incentives  
San Antonio, TX Property Tax Abatement (Chapter 312) Economic Development Incentive Fund (Chapter 380)
San Diego (City), CA Business Industry and Incentive Program Business Corporation Program
San Diego County, CA Personal Property Tax Exemption Reduction and Moratoria (Policy A-124)
San Francisco, CA Central Market/Tenderloin Payroll Tax Exclusion Net New Payroll Exclusion from the Payroll Expanse
San Jose, CA Negotiated Discretionary Subsidies  
Tarrant County, TX Tax Abatements  
SOURCE: Good Jobs First