Indiana senator proposes jobs transparency law
Indiana taxpayers have a right to know how many jobs they are paying for.
That is the position of State Sen. Mike Delph (R – Carmel), who has filed legislation that would prevent the Indiana Economic Development Corporation from keeping actual job realization numbers a secret.
"There's nothing more disconcerting to me as a public policy maker than when I feel like the public is being intentionally misled by its own government," Delph told WTHR. "That's not right and that should never happen. When it's public tax dollars at stake, you have a right to know how your tax dollars are being spent."
Delph's bill, SB 162, would require more transparency from IEDC, the state agency created by Gov. Mitch Daniels that oversees the state's economic development activities. Over the past five years, the quasi-state agency has offered more than $500 million in publicly-funded tax incentives to private corporations in exchange for locating or expanding their business in Indiana and creating tens of thousands of jobs.
But a year-long Eyewitness News investigation showed as many as 40% of the 100,000+ jobs promoted by the governor and IEDC officials from 2005 to 2010 never materialized, and IEDC refuses to release detailed job information to show which companies have met their job commitments and which ones have not.
IEDC says companies receive their tax incentives only after they prove they have achieved their job projections, and the agency says it checks annually to make sure those projections are met. IEDC will not, however, share that compliance information with the public.
That would change if SB 162 becomes law.
The legislation specifies that companies receiving state economic development incentives must submit a more detailed annual compliance report to IEDC. Each report must include updated job and investment data and, under SB 162, the reports must be available for public inspection and copying.
"The gist of SB 162 is to make more information publicly available. There would be more transparency and more accountability," Delph said.
The senator filed the proposed legislation after learning IEDC will not release basic information, such as a list of all "active" companies currently receiving incentives from the agency.
WTHR requested that list in April, and the agency said it does not exist.
"IEDC does not maintain such records in list form…" wrote IEDC general counsel Stephen Akard.
IEDC could have created the list, but is not required to do so under state law. Creating that list would have taken no more than one hour, according to a longtime IEDC employee who asked not to be identified.
Instead, IEDC is attempting to comply with WTHR's Access to Public Records request by redacting and photocopying tens of thousands of pages of final agreements with more than 1,000 companies on its active project list. That process has, so far, taken IEDC eight months to provide 12,000 pages of records. The process is only 40% complete. That means, at the current rate, it will take IEDC nearly two years and roughly 30,000 photocopies to provide the same information it could have shared with WTHR by making an electronic list that would have taken a staff member one hour to create.
"It's simply outrageous and unacceptable," said Delph. "That time would be better spent attracting new jobs for Indiana, and it makes you wonder why they wouldn't simply make the list and hand over the information. That is not transparency."
Other states, like Illinois, already have economic development transparency laws and provide far more economic development data than Indiana while exceeding Indiana in the number of companies that announce new projects there.
But IEDC has been steadfast in its opposition to releasing detailed job information for corporations that receive economic incentive deals in Indiana.
"This is performance information for companies. Performance information can affect their stock price. It can affect any number of things," explained IEDC chief operating officer Daniel Hasler. "It's their privacy we're trying to protect."
IEDC believes releasing more detailed information about companies will force businesses to create jobs elsewhere.
"I don't believe that for a minute. I've never understood the idea that transparency is somehow hostile to economic development. I think transparency will help economic development by giving the IEDC more credibility than they already have," he said. "The bottom line is people have a right to know how their tax dollars are being spent."
Senate Bill 162 has been filed. It will be formally introduced in January.
Democrats have tried to introduce similar legislation in previous years, but those bills went nowhere. Delph is a Republican, and he hopes his transparency bill will get bipartisan support at the Republican-controlled statehouse.