The Atlanta Journal-Constitution reported Sunday that a group of companies awarded more than $106 million in public grants fell short of producing the number of jobs they promised by about 42 percent.
Georgia’s accountability agreement calls for companies receiving public grants to deliver at least 80 percent of the jobs they promised to fulfill legal obligations.
In 2005, the state implemented a 70 percent job creation requirement that would allow state officials to recoup some or all of the grant if the companies don’t meet the benchmark. Georgia Department of Economic Development Commissioner Chris Cummiskey increased the standard to 80 percent, citing concerns that the previous one was too lenient.
Greg LeRoy, the executive director of Good Jobs First and a critic of state economic development incentives, said between a third and 40 percent of companies that are awarded publicly financed job creation grants fall short of their promises. Several companies that have been awarded grants have also either folded or have laid off workers in other parts of the state.
Brian Willamson, the deputy commissioner of the Department of Community Affairs told the newspaper that accountability requirements have improved over the years. His department administers the grants.
The incentive packages have led to some success stories in the state. Newell Rubbermaid, the Crider chicken canning plant in southeast Georgia and Bass Pro Shops in middle Georgia created more jobs than they had promised.
However, unlike Texas – a leader in providing incentive packages – Georgia doesn’t post an online scorecard tracking whether companies are delivering a certain number of jobs by a certain date. Officials post grant recipients online, but information on whether they’ve met their job creation goal is stored in paper files, and some are kept in archives.
“This information should absolutely be more easily accessible,” said Alan Essig, head of the Georgia Budget and Policy Institute.
Critics say Georgia needs more effective ways to determine whether businesses are doing what they’ve promised with public money. The companies aren’t necessarily given a check for the grant amount, but the money is given to local development authorities that buy property, improve buildings and buy equipment to help the businesses expand.
“As much concern as there is about whether these incentives are effective, we have just seen a massive increase in their use,” said Marty Romitti, senior vice president at the Center for Regional Economic Competitiveness. His group considered Georgia among the most generous states in terms of offering tax breaks and grants in 2012.
“We do not have to match other states dollar for dollar, but we have to be in the ballpark,” Cummiskey said.