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One year after Governor Jan Brewer signed legislation officially creating the Arizona Commerce Authority, the Arizona PIRG Education Fund examined the transparency and accountability of the Commerce Authority thus far. The Arizona PIRG Education Fund, which has urged the Commerce Authority to provide transparency in the subsidies it disburses and to hold the companies receiving the subsidies accountable for results, gave some qualified praise and recommended some steps for improvement.
The Commerce Authority recently posted the first report on its deal-closing fund, called the “Arizona Competes Fund,” detailing the money disbursed so far and the expected results from the grant. The Arizona PIRG Education Fund commended the report, but also noted that no outcomes such as the number of jobs actually created as a result of the subsidy are available yet and urge the Commerce Authority to hold companies accountable to the promises.
“The new report from the Arizona Commerce Authority is a good first step for publicly reporting how tax dollars are being used,” said Serena Unrein, Public Interest Advocate for the Arizona PIRG Education Fund. “The Arizona Commerce Authority has set a strong and essential precedent by committing to quarterly reports that tell the public what kind of jobs they expect subsidies they grant to create. However, for the future, the Commerce Authority will need to make sure that companies receiving money from the deal-closing fund are following through on their job creation promises.”
The Arizona PIRG Education Fund did have some recommendations for how the Commerce Authority could improve its transparency, chiefly that they should integrate its economic development spending into the state's official transparency website, OpenBooks, in addition to continuing the quarterly reports. “It is important to include all subsidies the Arizona Commerce Authority disburses on the official state transparency website so lawmakers and the public can get the full picture about Arizona’s economic development spending,” Unrein remarked.
The level of transparency provided for the deal-closing fund does not extend to all subsidy programs controlled by the Commerce Authority. Good Jobs First, a non-profit, non-partisan organization that has done extensive research on subsidy transparency, pointed out that such detailed reporting is not given for the Quality Jobs Tax Credit program. “The Quality Jobs tax credit – which can cost taxpayers up to $30 million a year – is a large subsidy program and taxpayers deserve similar transparency to what the Arizona Commerce Authority is providing for the Arizona Competes Fund,” said Leigh McIlvaine, a Research Analyst with Good Jobs First.
The Arizona Commerce Authority is a quasi-public economic development entity that replaced the Arizona Department of Commerce last year. The Commerce Authority’s board of directors is comprised primarily of individuals from the private sector. The Commerce Authority has control over a variety of subsidy programs, including the new $25 million “deal-closing fund” that was created to entice businesses to relocate in Arizona.
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