Show me the (subsidy) spreadsheets!

Good Jobs First’s new report, Show Us the Subsidized Jobs, is its third assessment of state subsidy transparency, following up on reports published in 2007 and 2010. The good news is that transparency continues to spread: From 23 states in 2007 to 37 in 2010 to 47 plus the District of Columbia in 2014.* The bad news is that for most states, online transparency still has a long way to go.

Why is transparency important? As the reports says, without it, it

makes it impossible for the public to get at even the most basic return on investment, accountability or equity questions. Which companies received subsidies (and what kinds of companies)? Are they delivering on job creation? How good are the new jobs? Where will the jobs be located? Reasonable people cannot have an informed debate and policymakers cannot watch the store without good job-subsidy data.

Moreover, the cost of state (and local, much more poorly reported on) subsidies comes to some $70 billion a  year, according to my estimates. Moreover, there is a tremendous opportunity cost associated with this: While of course some jobs cost more and some cost less, at $50,000 per year in salary and benefits, that is enough money to hire 1.4 million state and local workers, more than have been laid off since the start of the recession.

Good Jobs First toughened its scoring system this year, making the raw numbers not directly comparable with previous reports. In particular, there is more emphasis on publishing outcome data such as jobs actually created, wage levels, etc. It is also important to note that the report only counts online transparency: If a state agency will give you some information on request, that’s nice but won’t improve a state’s score. We live in a wired world, obviously, so transparency performance should conform to that.

On its 0-100 scale, the best performing states are:

1) Illinois 65

2) Michigan 58

3) North Carolina 48

4) Wisconsin 46

5) Vermont 43

Even these have a long way to go, especially on job outcomes. But they are doing far better than the 14 states with scores below 10 (including Arkansas’ corrected score of 8). For example, Georgia, at 4 points, gets demerits because two of its major programs take down the reports a mere 30 days after they are posted.

Taking down data is a pet peeve of mine. Missouri, which ties for 14th for its reporting of state programs, also has quite good data online for local tax increment financing (TIF) subsidies, because the cities are required to file annual reports with the Missouri Department of Economic Development on a project-by-project basis. This requirement was given new teeth a few years ago, so the reports are now close to complete for recent TIF projects. Moreover, they have always been required to give both projected and actual job creation data (though not wage data). The reports provide the amount of the subsidy and the amount of the investment, allowing for the calculation of what the European Union calls “aid intensity,” which is the ratio of the subsidy to the investment. This is an important measure, because one obvious reform that could be made for any subsidy program is to cap its aid intensity. Why should Electrolux get a 99% free new factory in Memphis?

However, Missouri TIF reporting has long been hampered by projects that are listed in one year’s report disappearing in later reports. Moreover, all the old reports have been taken down by the state, making historical research (trends in aid intensity, anyone?) next to impossible. What I personally have by way of historical TIF data I obtained by hand transcribing information from the pdf format reports onto a spreadsheet. But obviously the state keeps these files somewhere, and Department of Economic Development officials in all probability have a master spreadsheet encompassing all project reports received. The ideal for research and democratic accountability purposes is simple: Show me the spreadsheets!

 

* The report says 46 states, but after its publication Arkansas belatedly identified two programs with online disclosure. This leaves only Delaware, Idaho, and Kansas as the only states with no online disclosure of their subsidy programs.

Cross-posted from Middle Class Political Economist.

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