Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Following the economic development money

Posted by David Kassel on August 7, 2008

CommonWealth magazine has an interesting article on economic development tax credits and the difficulty in finding out to whom hundreds of millions of dollars in those tax credits have gone in recent years in Massachusetts.

There is another aspect to this story—the hundreds of millions of dollars in funding, under some of the same legislation, for economic development loans and grants.   

By way of disclosure, I worked under contract with a number of people at the University of Massachusetts in what may have been the only comprehensive attempt so far to track that loan and grant money.  The Massachusetts Economic Assessment and Analysis Project (MEAAP) was, in fact, created under the same 2003 legislation that established some of the tax credits investigated by CommonWealth magazine.

Among other things, MEAAP produced MassEconomy.org, a website devoted, in part, to showing where the loan and grant money has gone under two major economic stimulus bills in 2003 and 2006.  However, there has been an apparent unwillingness by the Legislature to continue to fund the project at the same levels as in the past.  I’ve been told a decision has not yet been made by the project whether to maintain the website, which has not been updated for a few months now.  As of this writing, the website is still up.

The MassEconomy website attempts to track $82 million in funding for grants and loans provided under the 2003 legislation and an additional $151 million under a second major economic stimulus bill enacted in 2006.  As of April 2008, the state and quasi-public agencies that received this combined total of $233 million in state funding had approved grants totaling $56 million and loans totaling $34 million to a wide range of businesses and other applicants.  As of April, according to those figures, less than 40 percent of the loan and grant money had been approved for distribution by those agencies.

All of this is shown on the website’s Overview Page.  Viewers can link from the Overview Page to individual fact sheets for each grant and loan program.  The fact sheets show who has been approved for loans and grants, how much has been disbursed to them by the agencies, and other information such as how many jobs were created by the recipient of each grant or loan, if that information is applicable.

For instance, as of February 2008, the Board of Higher Education had approved $7.2 million in grants under its “Pipeline” program for instruction to students interested in math and science careers.  The Board of Higher Ed received $2.5 million under the 2003 stimulus legislation, an additional $4 million under the 2006 bill, and an additional $4 million in the FY 08 state budget.  As the Pipeline program Fact Sheet shows, that funding supported programs for 4,555 students and professional development for 521 teachers in 50 separate programs.

Many agencies receiving this stimulus funding were not as forthcoming as the Board of Higher Ed in providing up-to-date information about their grant and loan programs.  MEAAP had no power to compel this information from the agencies, so much of it remains incomplete.  Nevertheless, the MassEconomy website gives at least some idea as to where this money has gone.

It’s unfortunate that the Legislature, which has seen fit to provide hundreds of millions of dollars to state and quasi-public agencies to distribute as grants and loans for economic development, does not seem as interested in knowing where all the money is going.

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