Development groups’ transparency differs

By JOHN SEASLY
Herald Staff Writer

A new bill signed into law Tuesday demands greater transparency from the Indiana Economic Development Corp. The same level of transparency is not required from local economic development agencies like Dubois Strong, which receives nearly half of its budget from public funds.

Although it is not legally obligated to do so, Dubois Strong disclosed portions of its 2011 financial information online and to stakeholders, including the governments of Dubois County, Jasper, Huntingburg, Ferdinand, Holland and Birdseye. It plans to publish its 2012 report shortly after its stakeholders meeting Thursday, which is closed to the public, interim President Michael Cummings said.

Under Senate Bill 162, the state agency must disclose specific results related to its goals. The group must provide an annual report that lists the actual number of jobs created, as well as the number of jobs expected, as reviewed by an independent auditing firm. The report also must list the tax credits claimed, recaptured incentives and the investments made by recipients of tax credits, loans and grants.

The bill applies retroactively. A previous incarnation of the law required a certain level of disclosure dating back to 2007. This new law requires disclosure starting in 2005, the year the state agency was created.

SB162 was passed after the state agency faced criticisms of inflated job creation numbers. The corporation receives more than $100 million each year in tax funds to companies that agree to create jobs in Indiana, but regularly withheld detailed job information from taxpayers, claiming the information is a trade secret, according to WTHR-TV in Indianapolis.

A yearlong 2011 investigation by WTHR revealed that tens of thousands of the more than 98,500 jobs the corporation committed to creating between 2005 and 2009 failed to materialize.

David Penticuff, an editor at the Chronicle-Tribune in Marion, advocated in a Jan. 31 op-ed piece that the new accountability required of the state agency be applied to local agencies as well.

“Most of them are nonprofit and classified private nonprofit, yet they have a great deal of control over public money, and there’s very little oversight in many counties of what they do with that money and that is simply, in the face of it, wrong,” Penticuff said to The Herald.

He advocated that the local agencies open up all meetings that are not related to the recruiting of specific businesses. He also advocated that they report publicly how their public money is spent.
“A lot of times they are taking money straight from the taxpayer but the taxpayer has no say in how the money is spent.”

While the bill does not apply to local agencies, Dubois County Council President Greg Kendall said that its ideas make sense.

“It sounds to me like that would be a very good bill” if it applied locally, Kendall said. “I think it’s only fair to the taxpayers. They should always know how their money’s being spent.”

Cummings said he agreed with some of the bill’s ideas, but emphasized the difference between transparency and disclosing information.

“Sometimes transparency is a more difficult question,” he said. “Working with companies, that information is sensitive.”

Dubois Strong receives its funding each year from local governments and from private businesses. Public contributions came to $125,000 in 2012, with $59,263 from Dubois County, $49,420 from Jasper, $9,835 from Huntingburg, $5,063 from Ferdinand, $1,086 from Holland and $334 from Birdseye.

Private donations have never reached this amount. They hovered above $100,000 from 2005 to 2007, then fell sharply, to $81,150 in 2008, $48,450 in 2009 and $45,100 in 2010. In the last two years, private donations increased, to $54,300 in 2011 and $61,525 in 2012.

Dubois Strong also receives grant funding, which amounted to $76,000 in 2011 and $94,000 in 2010, according to its 2011 financial report. The report, which can be found at
www.duboisstrong.com/index.php/about-dubois-strong/news-media, lists the agency’s total disbursements, highlights of its year and some projected spending on 2012 projects, but does not break down its budget in specific detail.

Penticuff emphasized that he is not opposed to economic development efforts, but that he wants them to be conducted in a responsible manner.

“Certainly if someone is taking our money and is not responsible to anyone in the public for how they spend that money, that is a recipe for disaster,” he said.

Contact John Seasly at jseasly@dcherald.com.




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