When a business gets a sweetheart tax deal from state government, it's only fair for the public to know how big that deal is, and what taxpayers are getting in return.
That reasonable degree of disclosure has never been required of the beneficiaries of JOBZ. Gov. Tim Pawlenty's prized rural development program offers manufacturers freedom from state and local taxes if they locate in distressed Job Opportunity Building Zones. But it does not ask beneficiaries to disclose how much their tax bills would have been, had they located outside the zones, or indicate how much revenue each taxing jurisdiction -- state, county, city, school -- goes without as a result.
As Star Tribune staff writers Mike Meyers and Pat Doyle reported last week, not knowing how much of a good deal JOBZ provides is beginning to chafe at business owners who aren't in on the deals as well as elected officials who are casting about for more revenue as the economy tightens.
A similar complaint has come from public policy analysts. Jack Geller, a consultant and former president of the Center on Rural Policy and Development, which has followed JOBZ closely since its inception in 2003, said the program has another accountability flaw. JOBZ employers are required to report how many new jobs they created. But there's very little effort by state inspectors to verify those reports, Geller said. "They may be accurate, but we just don't know that they are."
As a result, he said, it hasn't been possible, "in a definitive way" for taxpayers to judge JOBZ's value or effectiveness.
That should change -- and it appears about to. The Office of the Legislative Auditor -- which has access to non-public tax returns -- is at work on its first thorough study of JOBZ. That report, due in February, should trigger the Legislature's closest scrutiny of the program's design and merit since its inception.
At a minimum, the 2008 Legislature should improve JOBZ's transparency and accountability. But the auditor's report might prompt a bigger question. If the report does not assure Minnesotans that JOBZ's value as an economic stimulant outweighs its costs, the program should be either redesigned, or scrapped.
JOBZ won this newspaper's reluctant support in 2003, as the only politically and financially feasible state initiative in sight to shore up an ailing rural economy. Since then, it has become the favorite tool of some outstate economic development officials, while proving almost useless to others -- particularly low-population places that are not served by major highways, where most business activity is commercial, not industrial.
