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WASHINGTON -- More than one-third of U.S. states are failing to make critical information about how governments are subsidizing business projects with taxpayer dollars readily available to the public online, according to a new report from U.S. PIRG Education Fund and Frontier Group. Following the Money 2019, the organization’s tenth evaluation of online government spending transparency, gives 17 states a failing grade, while only four states received a grade of “B” or higher.
State and local governments give more than $70 billion in economic development subsidies each year to private entities, hoping to stoke investment and job creation. These subsidies come in many forms, from tax credits for filming movies on location to direct cash grant payments to subsidize construction -- such as building a new sports stadium. All 50 states have economic development programs. But while these subsidies are a form of public spending, they are rarely held to the same transparency standards as other government expenditures.
"As taxpayers, we should be able to see how government spends our money down to the dime," said Andre Delattre, U.S. PIRG Education Fund executive director. "That includes the billions of dollars that state and local governments give away each year to lure businesses into their backyards."
U.S. PIRG Education Fund and Frontier Group’s Following the Money reports have evaluated states on online spending transparency since 2010. While many states have made progress toward providing citizens access to government spending information online, this year’s report finds economic development reporting is still lagging behind.
"It's often easier for citizens to see when a state hands a company $50 for printer ink than when it hands a company a million dollars to relocate its headquarters," said R.J. Cross, the report’s lead author and a policy analyst at Frontier Group. "States have moved light years ahead in the last decade when it comes to providing information on basic government spending online. But when it comes to economic development subsidies, most are still in the dark ages."
The report graded each state’s transparency efforts from “A” to “F” based on the availability of online reports detailing how much the state spends on tax breaks and direct grant programs; the availability of information on individual payments to companies on the state’s transparency site; and the existence of state laws that require ongoing reporting of information on economic development subsidies to the public.
Ohio received the report’s only “A” grade, while Wisconsin, Connecticut and Mississippi were the only states to receive “B” grades. The other 46 states do not provide consistent, comprehensive and accessible information online.
“Transparency checks corruption and enables citizens to hold their elected officials accountable,” finished Cross. “Without access to information, it’s impossible to know how fully these corporate subsidies are serving the public’s interest.”
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