Near the end of my interview with State Auditor Doug Hoffer today, I asked a pro forma question and got a surprisingly impactful answer.
The question: Is there anything you’d really like to tackle, that you’re not ready to take on just yet?
The answer: “I have a number of interests from my work over the years, particularly in economic development and related tax policy.” Hoffer cited his Unified Economic Development Budget Report as a source for his concerns over economic development programs, which are aimed at encouraging private-sector job growth through a variety of means, such as tax incentives and credits.
This won’t come as a surprise to those who have followed Hoffer’s work over the years. But it may come as something of a shock to the system, now that he has the authority of high office to back up his concerns. He could produce some work that would really shake the economic-development status quo.
First, his comment from today on the work that needs to be done in this area:
… to look at those job creation programs that have strategic plans and measures in place, and to find out if they have data, and if they have data, find out if it’s reliable. And I happen to know that, for the most part, they don’t and it’s not.
That’s a powerful assertion delivered in an understated way. To flesh it out, I went back and looked at Hoffer’s 2009 Economic Development Budget Report (a link to the full report can be found here). Which includes statements like:
There was “a lack of clear and measurable goals for each initiative/program”… which “is especially troubling because it has been required by law since 1993.”
“… the statutes… call for disclosure and performance reporting. They are both over ten years old. The Agency [of Commerce and Community Development] has never complied with either one.”
“… the failure to present this type of information raises some questions about the UEDB process and the willingness of the [Douglas] administration to take a hard look at the facts.”
In short, the state’s economic development programs have had virtually no effective oversight. And, in fact, have been in consistent violation of the law.
There’s no accounting for the dollars spent (or foregone due to tax breaks and credits); there’s no consistent effort to tie specific programs to tangible results. Since the early days of the Dean Administration, we’ve been tossing money around with no clue whether it’s having any effect aside from draining the public treasury.
Just imagine the hue and cry if a Human Services program was administered in such an egregiously slipshod manner. Heaven forbid we should waste a dollar on a poor person; but big giveaways to business? Heck, why not.
Hoffer’s 2009 analysis of job trends indicated that macro-economic factors had far more impact on jobs than any state ED program:
What I am suggesting is that the state actually has very limited control over private sector job growth. The most significant factors are beyond our control. … This is not to say we shouldn’t have an aggressive strategy. Only that whatever we’re doing today may not be sufficient to overcome the large forces at work.
Hoffer also gave some concrete evidence that the Shumlin Administration is supportive of a thorough ED review, saying that Commerce Secretary Lawrence Miller “would agree that many of the [ED] programs are challenged” in data and documentation, and that Miller “is committed to” an audit of the programs.
Given Hoffer’s past research on the subject, I suspect that a future audit will discover that, more often than not, we are failing to get a good return on our ED initiatives.