Gov. Jerry Brown signed AB 562, a bill that would require any local agency that oversees economic development activities to provide specified information to the public before approving any economic development subsidy.
“Taxpayers deserve to know the benefit to them of awarding economic development incentives to businesses, or if their tax dollars are better used elsewhere,” said Assemblyman Das Williams, D-Santa Barbara. “AB 562 will help to remedy this situation.”
Economic development subsidies are among the most widely used tools cities have to redevelop underperforming areas and stimulate local economies. While residents sometimes benefit from better economic conditions, it is typically private developers who directly benefit from these subsidies.
AB 562 will require transparency and accountability for these decisions. By providing detailed information at the inception of a project, local communities will have the necessary information to see the proposed subsidy’s actual costs and benefits.
Specifically, AB 562 requires the following be available to the public through the local agency’s Internet website:
» The name and address of the beneficiary, except the address does not need to be included if the beneficiary is a sole proprietor.
» The start and end dates, along with the schedule for the subsidy.
» A description of the subsidy, including an estimate of the total expenditure of public funds or revenue lost to the local agency.
» A statement of the subsidy’s public purpose.
» Projected tax revenue to the local agency as a result of the subsidy.
» Estimated number of jobs created by the subsidy, broken down by full, part time, and temporary positions.
The first step towards accountability is to require full disclosure of subsidies that are being granted. It is impossible to determine if these incentives work without adequate information on specific subsidy deals.
— Josh Molina is the communications director for Assemblyman Das Williams.