Truth in “Transparency”

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Our new study, Show Us the Subsidies, evaluates how well states disclose information about job creation and quality resulting from state economic development subsidies. However, we were not in a position to evaluate the accuracy of disclosed data.

Just such a controversy on this issue is emerging in Indiana. Over the last 18 months, the job creation numbers put out by the state’s primary economic development agency, the public-private Indiana Economic Development Corporation, have been challenged by WTHR investigative reporter Bob Segall in Indianapolis. Both the Governor and the IEDC claim to have created 100,000 jobs using subsidies. When Segall sought to confirm IEDC’s job creation claims, the apparent truth fell far short of those lofty promises.

Segall looked up subsidized “job-creating” companies and knocked on their doors only to find a number of abandoned offices and empty cornfields. An audit released this week performed by an independent consultant confirmed Segall’s findings. Of the 57,100 jobs that recipient companies pledged to create in 2009, only 37,600 were actually created. That’s only 66 percent of the jobs the state said it had created, and far short of the 100,000 the IEDC and Governor claim. Worse, many workers in Indiana continue to suffer as the pain of the recession lingers on.

It’s not the first time job creation numbers have been found to be severely flawed. A Milwaukee Journal Sentinel investigation in 2007 found similarly inflated findings in Wisconsin. Later, the Wisconsin legislature passed Public Act 125 requiring better disclosure on outcomes.

What Indiana’s over-reporting of jobs tells us is that simply reporting promised job creation isn’t enough. Transparency must follow-through and report on concrete outcomes.

One Response to “Truth in “Transparency””

  1. Mark Cassell Says:

    For what it’s worth, this is exactly the kind of scheme the new Republican government in Ohio is creating. An article in the Cleveland Plain-Dealer revealed today that the Republican governor along with his majority in BOTH houses of state government plan to avoid state transparency and oversight laws. Here’s the link:

    http://www.cleveland.com/open/index.ssf/2011/01/gov_kasichs_new_economic_devel.html

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