Online disclosure of the names of companies receiving state and local tax breaks, cash grants and other subsidies for job creation is becoming the norm around the country, but there is wide variation in the quality of the reporting and about a dozen states are still keeping taxpayers in the dark, according to a report published today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC.
Illinois, Wisconsin, North Carolina, and Ohio were found to have the best economic development disclosure.
“With states being forced to make painful budget decisions, taxpayers expect economic development spending to be fair and transparent,” said Good Jobs First Executive Director Greg LeRoy. “Claims that sunshine would hurt a state’s business climate have been discredited, trumped by people’s rising expectations about government information being online.”
In addition to the report, entitled Show Us the Subsidies, Good Jobs First also released two new online tools relating to state government economic development practices: Subsidy Tracker, a searchable database that brings together subsidy recipient information from numerous state governments; and Accountable USA, a set of webpages on each of the 50 states and the District of Columbia summarizing their track record on subsidies. All these resources are available at no cost on the Good Jobs First website.
“The outpouring of job-subsidy data is a breakthrough for state government transparency and accountability,” said Good Jobs First Research Director Philip Mattera, principal author of Show Us the Subsidies and leader of the six-person team that produced the report, Subsidy Tracker and Accountable USA. “Enhanced disclosure makes it much easier to monitor the tens of billions of dollars in taxpayer revenues that are being diverted to private parties each year.”
Show Us the Subsidies rates the reporting practices of 245 key economic development subsidy programs from around the country on the inclusion of information such as company-specific dollar amounts, job-creation and wage-rate numbers, and the geographic location of subsidized facilities. Programs are also evaluated in terms of how easy it is to find and use the online data. Each program is rated on a scale of 0 to 100 (with extra credit for including advanced features). The scores for the programs in each state are then averaged to derive a state score.
The report’s key findings are as follows:
- Thirty-seven states provide online recipient disclosure for at least one key subsidy program.
- Based on our scoring system, the states with the best averages across their programs are: Illinois (82), Wisconsin (71), North Carolina (69) and Ohio (66).
- Thirteen states and the District of Columbia currently have no disclosure at all, although one of those states, Massachusetts, is slated to come online as enacted legislation takes effect. All our scoring is based on what was available online as of November 26, 2010.
- Since 2005, half a dozen states have enacted legislation mandating subsidy recipient reporting in one or more program, the most recent being Massachusetts. Several other states have moved toward transparency through administrative action alone.
- Four states provide recipient reporting for all the key programs we examined: Missouri, North Carolina, Ohio, and Wisconsin.
- Of the 245 programs we examined, 104 of them (42 percent) have online recipient reporting.
- For the country as a whole, the average program score is 25. Ignoring those with no disclosure, the average rises to 59. Nineteen programs are above 75, including three that score over 100, thanks to extra credit. The top-rated programs in terms of disclosure are in Illinois and Texas.
- We also provide the results in the form of letter grades, but in a way that diverges from the usual system used in schools. We limit the failing grade of F to those states with no disclosure at all, and we stretch out the ranges for the lower passing grades (see the table below for details). Using this system, Illinois gets a B; Wisconsin gets a B-minus; North Carolina and Ohio get a C-plus; and Missouri gets a C. Seven states get a C-minus; seven get a D-plus; nine get a D; and nine get a D-minus.
“Our findings tell two different stories,” LeRoy said. “The first is one of the steady spread of transparency across the nation. The other is that some states still inexplicably keep taxpayers completely or partially in the dark. The accountability movement has made great advances but still has a long way to go before job subsidies are as transparent as other categories of state spending, such as procurement.”