JOB OPPORTUNITIES TASK FORCE

Advocating better skills, jobs, and incomes

TO: Hon. Sheila E. Hixson, Chair, and members of the House Ways and Means Committee

FROM: Melissa Chalmers Broome, Senior Policy Advocate

DATE:             March 22, 2005

The Job Opportunities Task Force (JOTF) is an independent, nonprofit organization that advocates better jobs, training, and wages for low-income workers and job seekers in Maryland. We support HB 1492 as a means of ensuring that taxpayer dollars and public funds are used to create family-supporting jobs by increasing accountability in the economic development subsidy process.

Though Maryland spends millions of dollars every year to spur job creation and retention, subsidy recipients are not required to disclose information on whether they meet job creation projections that were initially agreed upon.  Economic development funds should be used to create and preserve good economic opportunities for all Marylanders.  By not holding subsidy recipients accountable, it is impossible to assess whether the state is meeting its job creation targets. 

HB 1492 would address this gap by requiring state agencies to publish annual reports on the jobs created or retained by each company receiving an economic development subsidy (such as a loan, tax incentive, or grant).

In August 2005, an audit released by the Maryland Office of Legislative Audits (OLA) found that Maryland forgave $19.3 million in loans to businesses without verifying whether the companies actually created any new jobs. OLA noted that the state failed to adequately track employment data on 25 loans administered from two economic development funds.

When taxpayer money is used for something that is supposed to be for the public good, it is imperative that the ultimate outcome be made public. Currently, DBED only reports projections of jobs, not actual jobs created. These data are not company-specific and are only presented in the aggregate, which means there is no way to compare the dollar amount of each subsidy to the number or quality of new jobs.

HB 1492 would make economic development deals more transparent, allow the public to participate in informed debates about economic development priorities, and would help assure that public funds are being used for a good purpose. As the state continues to tighten its fiscal belt, assuring that public funds are used to create and retain quality jobs becomes all the more critical. JOTF therefore encourages a favorable report for HB 1492.