Archive for March, 2013

More Subsidy Disclosure Coming in Oregon

March 15, 2013

winThis week our friends at OSPIRG scored another major win for subsidy transparency and accountability. OSPIRG, which played a central role in getting the state to adopt tax credit disclosure in 2011, is now bringing transparency to another key subsidy, the Strategic Investment Program (SIP).  SIP exempts many of Oregon’s largest and richest companies (especially Intel) from property taxes, based on agreements that those companies will be creating jobs.

Business Oregon, the state’s economic development arm, recently denied an open records request by OSPIRG to provide details about the state’s SIP deals.  OSPIRG then appealed to the state Department of Justice, which decided in favor of transparency and ordered Business Oregon to release records of the deals by next week.  The economic development agency is expected to comply.

While Good Jobs First has successfully obtained some types of SIP subsidy details in the past, the public has never had access to information about what exactly companies are promising in return for the special tax breaks.  Citing the program’s $322 million biennial cost, Celeste Meiffren of OSPIRG stated that “disclosure of information about SIP and all other economic development tax expenditures is important because taxpayers need to be able to track their return on investment.”

Way to go, OSPIRG!

Posted in Disclosure, Job Quality Standards, Jobs, Subsidies | Leave a Comment »

A Tale of Two States (and Subsidy Transparency)

March 15, 2013

Florida and Mississippi may come close to sharing a border, but they are worlds apart in their current approach to the disclosure of economic development subsidies.

Florida has just launched an Economic Development Incentives Portal that makes it easy to discover which companies have benefited from programs such as the Quick Action Closing Fund, the Qualified Target Industry Tax Refund and the High Impact Performance Incentive.

Online subsidy disclosure is not completely new to Florida. An agency called the Governor’s Office of Tourism, Trade and Economic Development used to post a PDF list of recipients for various programs. After Rick Scott took office as governor in 2011, that agency was put under the auspices of the new Department of Economic Opportunity, and the old disclosure site disappeared. DEO promised to restore transparency and has now made good on that promise.

The new portal, produced by DEO in partnership with Enterprise Florida, covers a dozen programs with a total of about 1,250 entries, including “every non-confidential incentive project with an executed contract since 1996 that received or is on schedule to receive payments from the state of Florida.” DEO promises to add listings for confidential projects as their exemptions from disclosure requirements expire.

Searches can be targeted according to business name, county or date range. The results show company name, industry, subsidy value, county, approval date and project status. They also include both committed and actual numbers for jobs and investment, though in many cases the performance figures are listed as not available. The portal also includes projects that are inactive or have been terminated.

Florida’s portal is an important advance for subsidy transparency. The site would be even more useful if it included street addresses for the subsidized facilities (to facilitate mapping) and allowed downloading of search results in spreadsheet form.  At my request, DEO sent such a spreadsheet for the entire database, which I used both to prepare this piece and to upload the information to Subsidy Tracker.

Mississippi, on the other hand, is resisting online disclosure. The state legislature recently killed a bill that would have required the Mississippi Development Authority to publish an annual report on the tax credits, loans and grants it provides to companies in the name of economic development.

It turns out that the agency produced such a report for internal purposes but did not make it public. A group called the Bigger Pie Forum learned about the document—the 2012 Mississippi Incentives Report—and filed a successful freedom of information act request. Bigger Pie was only able to get a hard copy, but it scanned the report and has posted it online here. The info in that report has also been added to Subsidy Tracker.

Despite the reluctance of state legislators, online subsidy disclosure has come to Mississippi. Perhaps the Magnolia State will realize the futility of resisting official transparency and join the Sunshine State, among about 45 others, in making subsidy information directly available to the public via the web.

Posted in Disclosure, Subsidies, Subsidy Tracker | Leave a Comment »

Massachusetts Business Tax Breaks Evaluated in New Report

March 12, 2013

masspirg reportA new MASSPIRG study asks if Bay Staters are “Getting Our Money’s Worth?” from the Commonwealth’s corporate tax breaks.  The organization evaluates 25 different special business tax subsidies for fiscal safeguards and accountability and transparency practices.  Among other findings, MASSPIRG concludes that:

  • Less than one-third of the subsidies are subject to annual spending limits.
  • Few of the Commonwealth’s special business tax subsidies have well-articulated public policy goals.
  • Nearly half of all business tax subsidy programs fail to publicly disclose information important for transparency such as recipient names, program-wide cost to the state budget, or results generated by the program.

MASSPIRG  also finds that state spending on business tax subsidies has more than doubled since 1996; the Commonwealth spent an estimated $770 million in 2012 through programs such as the Economic Development Incentive Program and the Film Tax Credit.  MASSPIRG’s recommended policy options to help the state get the best results from its substantial spending on special business tax subsidies include:

  • Transitioning from business tax breaks to outright grants.
  • Adding mandatory public policy goals and expiration dates to new and existing subsidy programs.
  • Continuing to improve disclosure of subsidies awarded through these programs.

You can read the rest of the organization’s recommendations to help the state get the biggest bang for its buck in Getting Our Money’s Worth? here.

Posted in Clawbacks, Disclosure, Job Quality Standards, Jobs, Subsidies, Tax Expenditure Budgets | Leave a Comment »

State Chamber of Commerce Favors Clawbacks, Job Quality Standards, Enforcement

March 11, 2013

Image_Maryland_Money

Last Friday, at the Maryland Senate’s Budget and Taxation Committee hearing, representatives from the Maryland Chamber of Commerce endorsed cornerstone Good Jobs First reforms. This includes attaching strings to taxpayer-funded economic development deals such as money-back clawbacks when companies receiving taxpayer money fall short. The Maryland Chamber even implied that these reforms should apply not only to economic development subsidy deals, but also public-private partnerships (sometimes called P3’s) such as the concessions operations at Baltimore-Washington International Thurgood Marshall Airport (BWI).

In our two recent 50-state report card studies, Money for Something and Money-back Guarantees for Taxpayers, we documented the growth of these reforms across the states. It has become common practice for state economic development agencies to incorporate clawbacks and job quality standards into deals, though many states still don’t do enough or apply standards unevenly. But as the Maryland Chamber said, it’s a big problem when these agreements aren’t being adequately enforced to protect taxpayer money.

Below is a transcribed passage of the audio from the Maryland Senate’s Budget and Taxation Committee hearing. We think it serves to show the strong support for reforms like job quality standards, clawbacks and enforcement of clawbacks, even from powerful business interests. This portion of the hearing occurs around 1:05 in the recording.

Senator Richard S. Madaleno, Jr. (D-18th District): While the vice chairman raised many of the issues that I wanted to raise, I just wanted to be clear that you are saying Mr. Palmer, you are saying that there are times when in a contractual relationship between the government and a business we can put strings…

Matthew Palmer, Senior Vice President of Government Affairs at the Maryland Chamber of Commerce: Absolutely.

Senator Madaleno: This is how we’re going to treat your workers.

Mr. Palmer: Right.

Senator Madaleno: And in the case when they don’t and they violate that we can have clawback? You support that structure?

Mr. Palmer: Absolutely. And I think that’s important. As [the ABC representative] talked about with these P3’s, the flexibility of whether it’s [the Department of Business and Economic Development (DBED)] or other places actually putting that into contracts, you know, putting those strings as you said, with those companies and being able to, when they don’t meet those, claw that money back. Say OK, you didn’t meet your needs. I think that is absolutely appropriate and they should be held to it. I think that’s the problem. And unfortunately, it seems to me, in some of these instances [as we have heard from the testimonies of  workers at BWI airport, Baltimore’s Inner Harbor and Hyatt], some of those companies were not held to those standards. So I think that’s a big problem.

Posted in Clawbacks, Job Quality Standards | 2 Comments »