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Arizona Commerce Authority transparency criticized by PIRG

Don Cardon, left, President and CEO of the Arizona Commerce Authority, speaks as Gov. Jan Brewer, second from left, Chairman of the Arizona Commerce Authority, Jerry Colangelo, co-Chair of the Arizona Commerce Authority, and Arizona Speaker of the House Andy Tobin, far right, R-Dewey, listen during an Arizona Commerce Authority meeting Jan. 11 in Phoenix. (AP Photo/Ross D. Franklin)

The Arizona Public Interest Research Group yesterday released a report critiquing the Arizona Commerce Authority’s transparency practices, calling on the agency to make more information about subsidy programs available online and to fight for legislative change in areas where the ACA is prohibited by law from disclosing information.

“Since the Arizona Commerce Authority controls a whole bunch of taxpayer money it is important that they are transparency and accountable to the public,” said Serena Unrein, a public interest advocate with Arizona PIRG and co-author of the report. “Any Arizona taxpayer should be able to go online and easily be able to find information about where their taxpayer dollars are going.”

ACA spokeswoman Kristen Hellmer today said that the ACA has received the report and will be reviewing Unrein’s findings.

“We will be looking at everything and we will see what we can do. If there are certain things about posting on the website that we are able to post within the guidelines of the statute that governs us, than we will certainly take a look at that,” she said.

The report uses 10 best practices for economic development corporations that were developed by PIRG to evaluate ACA’s management of the 15 subsidy programs the agency oversees. While Unrein said she did not come across any instances in which the agency violated state disclosure laws, she did say the ACA could be doing more to make information about subsidy programs and the disbursement of taxpayer money easily accessible.

“Unfortunately, Arizona law prohibits a lot of information about what companies are receiving taxpayer dollars and how much money these companies are receiving from being released,” she said.

But Unrein noted that, in many areas not restricted by law, she found that the ACA only reports a bare minimum of information through the ACA website and Open Books, a state-run website that tracks government spending.

Of the 10 best practices identified in the report, the ACA partially or fully met all but two categories: The ACA does not post records of contracts and agreements online and has not created a process for challenging subsidies in the event a company believes a program unfairly favors competitors.

In response to the report’s call for the ACA to lobby for the power to disclose details about tax credit recipients and dollar amounts, Hellmer would only say that she does not know whether the ACA has discussed the possibility of seeking legislative change.

“We operate within the laws that are given to us if there are changes in the law, we will certainly abide by those,” she said.

Among the concerns cited in the report, what Unrein said she found the most shocking was a lack of information about what benefits the ACA expects to see in return for taxpayer money.

“Not only are we not telling the public what we are expect to receive in return for these subsidies, there is no sort of follow up to see if these companies are actually delivering on these promises that they’ve made,” she said.

The report states that, of the ACA’s 15 subsidy programs, information about the specific benefits that recipient companies are expected to deliver in return is provide only for the Arizona Competes Fund. The report also states that only the ACA only tracks whether those benefits are delivered for the Arizona Competes Fund and the Rural Economic Development Grant program.

Of the 13 grant and tax credit programs, the researchers could only find four that report specific information about recipients and the amounts of money they received: the Arizona Job Training, Rural Economic Development and Arizona Fast Grant programs and the Arizona Competes Fund.

However, the report provides few details on why the authors determined that the ACA’s handling of other programs fell below PIRG’s expectations. The ACA does provide information for several tax credits that are only available to companies after they have delivered on economic development benefits, like creating new jobs or investing in small businesses.

In those cases, Unrein said that simply disclosing the kinds of services companies must deliver in order to receive a tax credit that are required by law does not meet PIRG’s standards, though Unrein could not say what additional information the ACA should be providing. Those after-the-fact tax credit programs are also included in the report’s count of subsidies that do not have a follow-up process.

As for the nine programs that do not report specific details about recipients, two of them – the Quality Jobs Tax Credit and Healthy Forest Enterprise Incentives – have yet to be awarded.

Unrein said she did not know whether the ACA will report detailed information about recipients when money is disbursed, but said those programs were listed as not providing information because she would have liked to see the ACA state online that no funds have been awarded.

“It’s not checkbook-level detail if you can’t actually see the checkbook,” she said.

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