Indiana falls in job transparency rankings
While state leaders boast of a new job transparency law and a new job transparency website, a new report released Wednesday suggests Indiana has taken a significant step backward in providing public information about its economic development activities.
Good Jobs First, a Washington, D.C.,-based non-profit, non-partisan resource center that tracks economic development policy and transparency, has released its 2014 report card that analyzes and ranks all 50 states on their transparency involving job subsidies.
The detailed report, titled "Show Us the Subsidized Jobs," ranks Indiana 13th among states for its online subsidy disclosure. That is a surprising drop for the Indiana Economic Development Corporation's website, which was recently upgraded with the addition of a searchable online portal in an effort to improve transparency. IEDC's website ranked 8th in GJF's 2010 report (the last time the organization published a report card) and 2nd in 2007.
For its analysis, GJF scored each state based upon 23 criteria in seven categories. Indiana received a total of 171 out of a possible 500 points for an average score of 34. By comparison, Illinois (65), Michigan (58) and North Carolina (48) took the top three spots in this year's transparency rankings, while the bottom four states (Arkansas, Delaware, Idaho and Kansas) all received an average score of 0.
Calculating Indiana's score
"There are some things Indiana does well, much better than other states," said GJF executive director Greg LeRoy, while looking at Indiana's transparency portal. "But overall, this is not cutting edge disclosure. It's primitive in terms of giving you what you need to know, and to know if you're getting a bang for your taxpayer buck."
Indiana scored high for providing user-friendly features to search the transparency portal and for disclosing the value of the subsidies and tax incentives awarded to companies.
But GJF researchers gave Indiana low scores for failing to report the actual number of jobs created and actual wages paid by the hundreds of companies that are getting public tax dollars in exchange for job creation.
IEDC has argued a corporation's job-specific data is confidential information that, if released, could harm a company and make it vulnerable to its competitors. When asked last year at a legislative public hearing to provide evidence to support that position, IEDC president Eric Doden admitted the agency has no such evidence.
"The whole argument is balderdash," LeRoy told WTHR. "There's no evidence from any state – and we now have 45 states and the District of Columbia disclosing company-specific data online – that there's any harm to business climate. There's no state that can site evidence that they lost a deal or a company because they disclosed outcomes."
IEDC also says the information posted on the transparency portal goes "above and beyond the law," and that lawmakers – not IEDC -- dictate which job information is posted online.
"The General Assembly determined that [company-specific information] was not necessary, so that's where we stand," Doden told WTHR.
But Indiana's new job transparency law makes no mention of the transparency portal – let alone what should be included on that portion of IEDC's website – and the law does not prohibit IEDC from posting the actual number of jobs that a company creates in exchange for publicly-funded tax breaks.
The biggest blow to IEDC's 2014 transparency ranking comes from information exposed by 13 Investigates.
WTHR has discovered IEDC is withholding information about hundreds of economic development projects from the new transparency portal and that each month, the agency has been erasing dozens of public contracts from its website. Most of the missing information and deleted documents involve projects that failed to create the number of jobs originally publicized by IEDC.
Based on WTHR's findings – and GJF's independent investigation – Good Jobs First subtracted "penalty points" from IEDC's overall score.
In its report, GJF called IEDC's decision to withhold project information from the website "the opposite of transparency." The study further explains "We are unable to determine whether omissions such as these are intentional or accidental. However, these absent records make us continue to question the transparency practices in Indiana."
LeRoy was more direct in the assessment he shared with WTHR.
"It's sham transparency," he said. "In economic development, shortfalls happen. It's normal, but you don't hide it…. That's gaming the system. It's re-writing history."
Governor Mike Pence, who directed IEDC to create a transparency portal and who pledged more economic development transparency when he took office in 2013, would not comment on the assessment. His communications director called Good Jobs First a "partisan watchdog organization."
In contrast to that statement, three of the top-scoring states in this year's GJF economic development transparent study – Michigan, North Carolina and Wisconsin – have Republican governors like Indiana.
IEDC spokeswoman Katelyn Hancock respond to Good Jobs First's comments by questioning the organization.
"It is interesting that Good Jobs First is willing to provide the media with feedback about the portal but has yet to provide the IEDC with feedback directly," she wrote in a November e-mail. "On April 12, the IEDC sent a survey to Good Jobs First asking the organization to review the transparency portal before it was officially launched. The IEDC also personally reached out to Thomas Cafcas of Good Jobs First expressing our interest in their feedback on the portal via the survey. As of today (7 months later), Good Jobs First has not provided us with any feedback on the portal, via the survey or otherwise."
What Hancock did not mention in her response to WTHR is that Good Jobs First promptly replied to IEDC's invitation, offering to provide the requested feedback.
WTHR obtained those e-mails.
Twelve minutes after IEDC first asked for feedback, a Good Jobs First staff member sent the following response:
"We are very excited to hear about new transparency developments in Indiana. I track economic development issues for the state of Indiana and am the best contact here. Recently, we have worked with Maryland and Tennessee on developing improvements to their transparency portals. We would be happy to work with you as you beta test and make improvements to the new portal. Perhaps it makes sense to schedule a call with myself and either our executive director or our research director? Best Regards, Thomas Cafcas"
The following day, LeRoy followed up with another message:
"As Tommy explained, Good Jobs First constantly provides [technical assistance], usually pro bono, to public officials and others who seek to improve the transparency and accountability of economic development incentive programs. However, by providing any such assistance, we do not confer any sort of "Good Housekeeping Seal of Approval" to any state's programs and must always retain our autonomy and independence when, for example, we issue studies rating the states on accountability metrics. As long as IEDC and GJF are all agreed on such respective roles, we are happy to participate in a survey about your new portal and/or otherwise provide expert feedback on Indiana's efforts."
IEDC did not respond to LeRoy's message, nor did IEDC indicate whether it would agree to a shared understanding regarding the scope of any input provided by Good Jobs First. The state agency and policy resource organization have not communicated with one another since, although Doden said he would leave the door open.
"We have a really great relationship with Good Jobs First," Doden told WTHR earlier this month. "We are wide open in the spirit of continuous improvement to hearing from Good Jobs First and any concerns they may have."
More secrets exposed
Thursday night, WTHR will broadcast the results of its 6-month investigation to show you exactly what IEDC is hiding from its transparency portal. The 13 Investigates report will also expose IEDC secrets involving tens of thousands of jobs and more than a billion dollars in public tax money that it does not want lawmakers or the public to know about. The special report will air Thursday at 11:00 pm on Eyewitness News.