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Atlanta, GA – 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 Georgia’s performance is disappointing, according to a report published today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC.
Georgia received a grade of F because the state lacked reporting on subsidy recipients. Without this important transparency, taxpayers will be left in the dark about where their tax dollars are going. Georgia joined 12 other states in receiving a grade of F, including Arkansas, Delaware, Idaho, Kansas, Massachusetts, Mississippi, Nevada, New Mexico, Oregon, South Carolina, Tennessee, and Wyoming. Meanwhile, Illinois, Wisconsin, North Carolina, and Ohio were found to have the best economic development disclosure.
“Georgia can’t afford spending big dollars on subsidies without tracking where they go and whether they deliver bang for the buck,” said Stephanie Ali at Georgia Public Interest Research Group (Georgia PIRG). “When public dollars go to private businesses, we need the highest level of transparency.”
“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 2006, Georgia proposed the largest subsidy package to a foreign automaker, Kia Motors, in the country at the time. In exchange for the unprecedented $410 million subsidy, Kia promised 2,500 jobs at a West Point facility on the border between Georgia and Alabama. Amid the excitement of having attracted this facility to Georgia, few questioned the fact that the subsidy represented $160,000 per job, many of which would be held by Alabama residents.
“The outpouring of job-subsidy data is a breakthrough for state government transparency and accountability,” said Good Jobs First Research Director Philip Mattera, leader of the six-person team that produced the study and web tools. “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 and access of information such as company-specific dollar amounts, job-creation and the geographic location of subsidized facilities. Each program is rated on a scale of 0 to 100 (with extra credit for including advanced features). 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 disclose online the recipients of at least one key subsidy program.
· The states with the best scores for open information about subsidies averaged 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 examined: Missouri, North Carolina, Ohio, and Wisconsin.
· Of the 245 subsidy programs examined, 104 of them (42 percent) report recipients online.
· The average program score across the country is 25, but rises to 59 when Ignoring those with no disclosure. Nineteen programs score above 75, including three that score over 100, thanks to extra credit. The top-rated individual programs are in Illinois and Texas.
· Results are also provided in the form of letter grades, with the failing grade of F going to those states with no disclosure at all, and other letter grades assigned to scores from 1 to 100 (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.”
Good Jobs First today also released two new online tools: Subsidy Tracker, a searchable database on recipients of state economic development subsidies from numerous state governments; and Accountable USA, a set of web pages on each of the 50 states and the District of Columbia summarizing their track record on subsidies. All resources are available at no cost on the Good Jobs First website at www.goodjobsfirst.org.
“Every dollar spent on subsidies means a dollar less available for programs like schools or a dollar more that citizens must pick up the tab for in higher taxes,” said Ali at Georgia PIRG. In March, Georgia PIRG will again issue a 50-state scorecard on overall state spending transparency, Following the Money: How the 50 States Rate in Providing Online Access to Government Spending Data.
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