Transparency: Economic Development

In order to increase transparency in the way our state government grants tax credits to corporations, Senator James B. Eldridge and Representative Carl M. Sciortino have sponsored, along with forty-one State Representative and nine State Senator co-sponsors, an Act to Promote Efficiency and Transparency in Economic Development [Senate Bill S00153].

The act will:

• Require that all economic development tax breaks on both the state and local level be transparent and posted on the state budget website
• Require improved reporting data to evaluate the success of the investments
• Set standards for successful economic development programs and hold companies accountable to their job creation commitments by requiring companies to pay back the value of the tax break if they fail to meet their promised commitments.

The act establishes that if a company fails to meet its job creation commitments within two years, the state will be required to recapture (clawback) a pro-rated portion of the subsidy:

• Wages must remain at or above 85% of average wave for industry and region (75% for small businesses). This encourages spending that produces living wage jobs.
• The subsidy per permanent, full time job may not exceed $35,000, which is the limit set for job creation when applying for federal Community Development Block Grants.
• Section 12 empowers the Executive Office of Economic Development to waive the subsidy limit and job standards upon finding that there exist significant public policy goals apart from job creation.