Study finds details lacking in economic development deals

By John Gramlich, Stateline Staff Writer

The national economic downturn has turned many governors into salesmen-in-chief, moving aggressively — and often in direct competition with one another — to lure more private-sector jobs to their states.

Consider Rick Perry. The Texas governor raised eyebrows earlier this year when he wrote letters to 90 business executives in Washington State, urging them to relocate to Texas because of a proposed new income tax in Washington. "If Washington doesn't want your business," Perry wrote to the heads of firms including Microsoft and Starbucks, "Texas does." (Washington's proposed income tax failed at the polls in November.)

While sales pitches such as Perry's have become increasingly common, a new 50-state report finds that the details of what job-hungry states offer companies are rarely disclosed to the public in an easy and accessible way. States, in other words, place a premium on economic development, but not necessarily on informing residents about the tax breaks, grants and other incentives that are at the center of such deals.

Four states — Illinois, North Carolina, Ohio and Wisconsin — lead the nation in disclosing information about their job-creation efforts, according to the report, released earlier this week by Good Jobs First, a Washington, D.C., group that promotes more accountability of such deals. But even those states have plenty of room for improvement, the study finds.

Ohio, for example, provides information about tax breaks and other deals it gives to each company, but it does not provide information about whether companies held up their end of the bargain: whether they created the jobs they promised or made the investments they said they would, as The Columbus Dispatch notes.

While most states are not providing many details about their job subsidies, the study does note that substantially more states — 37 — now disclose information than the 23 that did so just three years ago. Thirteen other states and the District of Columbia, however, still provide no information at all.

“Our findings tell two different stories,” says Greg LeRoy, executive director of Good Jobs First. “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.”

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—Contact John Gramlich at jgramlich@stateline.org