Letting Sunshine in is Possible
Economic development “impact reports” can be outrageous. Like when they assume people going to a basketball or hockey game will buy hotel rooms for $731 per night and parking spaces for $75.
The Washington Post got ahold of just such a report that had been kept from the public, justifying a massive subsidy proposal to move the Washington’s NHL Capitals and NBA Wizards about five miles from DC to Alexandria, Va.
The billionaire owner of the teams, Ted Leonsis, wants over $1 billion of the public’s money, so it’s vital to know if the cost-benefit calculations are plausible.
The Post’s story helped shed light on the rosy, unrealistic projections, and light is a vital part of good government – especially in economic development, where puffy press releases and unsourced figures too often go unscrutinized.
In honor of Sunshine Week, we’ve spent last week spotlighting the good ways places are being transparent when it comes to economic development and corporate accountability. They can do it – so can all our governments.
Franklin County, Ohio
Led by Auditor Michael Stinziano, Franklin County, Ohio boasts a dashboard with figures on overall losses through three abatement programs (the Enterprise Zone Abatements, Environmental Protection Agency Abatements, and Community Reinvestment Area Abatement), as well as Tax Increment Financing (TIF). You can even download Excel spreadsheets with property-specific details.
Importantly, you can also see these tax expenditure totals on the website, so we know children’s services lost over $22 million, libraries lost $15 million, the board of developmental disabilities lost over $31 million, and public schools lost a whopping $133 million in 2023.
Oregon
Oregon’s Enterprise Zone site breaks down incentives in notable ways:
- Part A has data on projects that currently receive subsidies,
- Part B has data on projects that will start abatement in the upcoming year,
- Part C lists projects that finished abatements and now are paying taxes, and
- Part D lets you know which projects have been authorized for the subsidy and will start abatements in the future
Parts B and D are especially helpful, because some abatements last for decades. Knowing what their costs are now and into the future are yet another way of gauging whether the tradeoffs are worth it.
Madison, Wisconsin
Officials in Madison, Wisconsin do a great job presenting the city’s TIF policies alongside up-to-date maps and detailed financial data tracking TIF payments. Each active Tax Increment District (TID) boasts its own subsection, complete with the latest project plan and a concise history of any amendments.
The amendments are especially important because deals, once out of public eye, are often changed later. Companies come back asking to get out of local hiring agreements or wanting more money (or both, as Amazon did in Monroe County in 2021, when it first got $134 million but then a few weeks later got another $16 million).
Philadelphia
Philadelphia’s compliance with end-of-year reporting on tax abatements enabled education advocates to learn just how much money their schools were losing to corporate tax breaks. Armed with that information, then-City Councilmember Helen Gym led the charge to reduce some of the most harmful, egregious tax breaks that had benefited luxury residential building.
Good Jobs First research analyst Anya Gizis graduated from Philly’s public schools in 2019, the year the district lost $112 million to corporate giveaways – more than any other school district in the nation. She chronicled her experience: “While I was a student, there was more than one time that the ceiling collapsed; we were expected to walk around the debris. We used decades-old textbooks, went weeks with no toilet paper, suffered in hot classrooms, and knew our teachers were over-worked and under-paid.”
California
In the Golden State, the Labor Commissioner’s Office makes it easy to search for wage theft cases.
The LCO has brought nearly 19,000 cases for wage theft totaling $691 million in back wages for workers since 2000. These judgments are available on a searchable database easily accessible to the public, and cross-posted in press releases from the agency.
Even beyond the labor department, California regulators stand out for their transparency efforts. They have the largest state and local agency list from which we collect data for Violation Tracker, totaling almost 40 agencies across numerous industries.
The Golden State also has the largest number of local district attorneys who prosecute corporate misconduct; those in many states do not. We capture the case outcomes from their press releases.
Wilmington, Delaware
Companies seeking subsidies for a project are seldom content with just one tax break. Unfortunately, the lack of coordination between cities, counties, school districts, and state economic development agencies often results in excessive subsidization.
Wilmington, Delaware has done something to break this pattern: its Property Tax Abatement Program prohibits companies from getting city property tax abatements if they also petition New Castle County to reduce the taxable assessed value on the same property.
More of this, please.
Back in Virginia, the billionaire owner of the Wizards/Capitals and Virginia Gov. Glenn Youngkin (himself a multi-millionaire) continue to push hard to get a private sports complex financed with public dollars.
Transparency doesn’t ensure a wise decision, or a great project. Virginia may still gold-plate the sports complex, despite the academic consensus proving they are not economic engines. But without sunshine, ensuring anything good is virtually impossible.
We hope you’ve enjoyed our examples and that they’ve got you thinking, “Yes, our community can do this too.”