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How does the report card look?
Let’s just say that the grades aren’t nearly as good as the kids in St. Paul had led taxpayers to believe.
The program is designed to provide tax breaks to help spur business growth.
Let’s be clear: Growth is a good thing. But, how much growth has the program spurred?
Well, it depends upon whom you ask — and that causes a real big credibility problem that needs to be fixed.
If you ask the folks at the state Department of Employment and Economic Development, they’ll tell you that the Job Opportunity Building Zones program has helped businesses create 5,500 new full-time jobs, keep 4,500 positions in Minnesota and invest nearly $1.3 billion. That’s a pretty impressive report card.
But, if you ask legislative auditor James Nobles, it sounds like there’s some grade inflation going on. The auditor says you can probably cut those figures from DEED by at least 20 percent.
Nobles told a legislative committee Friday that DEED has overstated the benefits of the JOBZ program.
In some cases, Nobles says jobs have been double-counted — both as new jobs and as retained jobs.
In addition, he believes the program has failed to focus on the areas of Minnesota that need the most help.
Two more big problems show up on the report card. More than two-thirds of the businesses would have expanded without the tax breaks. And, some of the expansion has come at the expense of competitors. More on that in a moment.
As Nobles told a legislative committee Friday: “Public money is being spent here. It should be spent effectively, and we should bring to bear on this program — just like we do on every other program that spends public money — the tools of accountability and prioritizing.”
He added: “What is lacking here is any sense of prioritizing or strategy.”
Before proceeding with the JOBZ program, the state needs to assure taxpayers that there will be a sense of priority, a sense of strategy and a sense of trust in the numbers that we receive from the state.
Even the guy who sponsored the law that created the program in 2003 has questions.
Senate Taxes Committee chairman Tom Bakk is concerned that some companies haven’t delivered on the promise of new jobs.
Bakk would prefer continuing the JOBZ program, but: “If we can’t find any meaningful reforms to address the legislative auditor’s concerns, I’m going to propose we get rid of it.”
Before Gov. Pawlenty’s JOBZ program expands, legislators need to make sure that the program makes the grade on job creation in areas where growth is especially critical.
There’s one more element that the Daily News editorialized about a few weeks ago, and that’s the secrecy that surrounds this program.
Because this state program involves tax breaks, the Pawlenty administration believes that the information surrounding this program should remain secret.
Are you concerned that a neighboring business — a competing business — is receiving a tax break from the state?
You won’t be able to find that out from the state. It’s a secret — never mind that it involves taxpayer money.
That’s absolutely appalling.
It’s bad enough that secrecy continues to shroud this program.
It’s even worse to know that the report card clearly tells the taxpayers that this program doesn’t have all the oversight we need and doesn’t provide all the jobs that we have a right to expect.
Just as with Bakk, we would prefer that this program is fixed before it continues.
But, simply fixing the oversight and providing numbers that taxpayers can believe in won’t fix the entire problem.
The state also must drop the shroud of secrecy before we can truly believe that this program is a good deal for Minnesota taxpayers.
By Darrell Ehrlick, editor, on behalf of the Winona Daily News editorial board, which also includes publisher Rusty Cunningham and online editor Jerome Christenson. To comment, call (507) 453-3507 or send e-mail to letters@winonadailynews.com.
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