Indiana Senate committee approves weakened job transparency bill

Senator Mike Delph (R-Carmel)

INDIANAPOLIS - Indiana has spent hundreds of millions of Hoosier tax dollars to attract jobs, but the actual number of jobs created has been a tightly kept secret. Today state lawmakers had a chance to change that.  They debated a bill that would require the state's detailed job numbers to be released to the public. Despite talk of transparency, some state leaders are still fighting to keep job numbers private.

Across Indiana, 13 Investigates exposed abandoned factories and empty corn fields where the state claimed there were supposed to be thousands of jobs.

The Eyewitness News investigation showed the Indiana Economic Development Corporation had misled Hoosiers by skewing its statewide job numbers. For years, the state's official job-creation agency bragged about tens of thousands of jobs that had never come due to economic development deals that had failed to materialize.

Senator Mike Delph (R-Carmel) says the investigation is the impetus behind Senate Bill 162.  Tuesday at the Indiana Statehouse, Delph's bill took center stage as senators debated whether to change the culture surrounding Indiana's economic development transparency.

"At its core, that is what senate bill 162 is all about: disclosure, accountability, transparency," Delph said during his testimony before the senate Tax & Fiscal Policy Committee.

The legislation would require IEDC to be more open about the state's real job numbers by publicly disclosing not only how many jobs and how much investment each company predicted, but also how many jobs and how much investment each company has actually delivered.

Delph introduced the bill last month, after learning IEDC is keeping basic information a secret from the public. For example, just to see all the companies getting your tax dollars from IEDC, the agency told WTHR we'd have to look through more than 30,000 pages of documents. Nearly a year later, most of those documents still have not been released to Eyewitness News by IEDC.

"I don't think transparency and job creation are mutually exclusive or adversarial," Delph told colleagues at today's public hearing. "I think the public has a right to know what their return on investment is for their public tax dollars."

Over the past five years, IEDC has pledged more than $550 million in tax dollars to corporations in exchange for those companies creating, re-locating or expanding their business in Indiana.

Public watchdog groups such as the Hoosier State Press Association and Common Cause Indiana testified in favor of the proposed law.

"We believe this bill is needed to ensure the public gets the information they need and are entitled to," said Common Cause executive director Julia Vaughn.

IEDC was less enthusiastic about the bill.

"We are in general favor of transparency and accountability and, at the same time, we don't want to do anything that we believe would put at risk our ability to have jobs move to Indiana," said IEDC's newly-appointed president, Eric Doden.

While IEDC releases specific job numbers when it announces new projects at ribbon-cutting parties and job announcement ceremonies, Doden told lawmakers he believes his agency should not be required to release specific job numbers years later to show how many of those jobs were actually delivered.

He favors IEDC's standing policy of releasing only aggregate job numbers for the entire state – not detailed job numbers to show whether each company receiving state tax incentives is meeting its job commitments.

"When I was in business, the number of employees was a trade secret," he said. "If other people were permitted to see how well we did, especially competitors, that could be harmful to our business … any risk that would have a chilling effect on people's interest in coming here to Indiana should be avoided from my perspective."

Asked whether he had any evidence to show businesses would not be willing to bring jobs to Indiana if Indiana required heightened transparency, Doden told senators he did not.

"We do not have direct evidence that would happen," he said, adding that additional transparency in Indiana is not needed because Indiana rarely gives out incentive money until after corporations show they have created jobs.

Delph pointed out that evidence actually suggests otherwise. He cited a 2012 report from Site Selection Magazine that shows Ohio, Illinois and Michigan have all attracted more new facilities and expansion projects during the past three years than Indiana – despite the fact that all of those states have economic development transparency laws that require the release of detailed job performance numbers for companies receiving publicly-funded tax incentives.

But some state senators shared IEDC's concerns about the proposed transparency bill. 

Committee Chairman Brandt Hershman (R-Monticello) wondered aloud if the legislation might have unintended consequences by requiring IEDC to release too much information. He introduced an amendment to SB 162 that was full of recommendations favored by IEDC. 

The amendment would essentially strip down Delph's transparency bill and provide IEDC with a loophole for its future reporting.

It allows IEDC to submit an annual incentives and compliance report to the governor, legislature and public that includes limited information involving only "active incentive agreements." That would permit IEDC to include only the most successful companies it deals with in its compliance reports, allowing IEDC to omit non-active projects. Non-active projects include recipient companies that declared bankruptcy, those that decided not to move to Indiana following their publicly-announced job announcements, and those that failed to meet their job commitments for other economic reasons. It is estimated there are hundreds of non-active projects on IEDC's books, and few – if any -- of those projects would be mentioned in IEDC's compliance reports under the amendment proposed by Hershman.

The amendment would also eliminate a requirement that IEDC show how many jobs companies have actually created – not simply the number of jobs they hoped to create – while also deleting ambiguous wording that might have required IEDC to release information that companies consider proprietary.

"We favor the amendment," Doden told members of the committee.

With those changes, senators voted unanimously to pass the bill -- a watered-down version that requires no new transparency from IEDC.

Senators were quick to realize that.

"It's basically what they're doing already," said Sen. Lindel Hume (D-Princeton) just moments after the 12-0 vote was tallied.

While the amended legislation does not require IEDC to release any detailed job numbers – a primary goal of the original legislation – Delph remains optimistic. He believes the bill could be changed again once the bill goes to the full senate for a vote.

"It's my hope we can get an amendment and toughen the bill up and try to bring transparency to the IEDC," he said as he left the hearing room.