Keeping wage figures secret

December 8, 2009
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The Journal Gazette in Fort Wayne has written about an issue that Indianapolis Business Journal and perhaps other news organizations in the state have grappled with in reporting on economic development, namely whether the state is obligated to divulge wage figures when offering tax breaks to businesses. Read the story here.

The Indiana Economic Development Corp. makes a practice of withholding wage figures, arguing that to disclose them would put the companies at a competitive disadvantage.

The flip side of the coin is that the tax breaks in effect are a public subsidy; thus, the reasoning goes, the information should be made available. Otherwise, how else could the public determine whether the incentives are doing any good?

Broadening the argument for disclosure, Ohio and other states routinely make the information available. And the Journal Gazette quoted a lawyer for the Hoosier State Press Association saying there is no law to prevent IEDC from disclosing wage figures.

Which side do you come down on?

  • My question is...
    I have thought about it and currently unsure if that would be a good thing or a bad thing. I do have one question though. If people are providing money to you (employers, money for college, etc.) will they have the ability to find out how much you are making? For instance, Mr. Simon, owner of Simon Properties, does he have the right to investigate the pay of any employee or is that beyond legal abilities? on the same note, if we as the taxpayers are giving tax credit to such companies for wages, shall we also know the same figures?

    On a similar note to that, there are services like Vocational Rehab., which is a service provided in Indiana (and probably in other states as well), which uses tax dollars (based on county) to assist people with disabilities. Do we have the right to find out how much is being used on each client of Voc. Rehab?

    These might not have exactly clear results, but bring up some good legal questions of where do we draw the line between privacy and public knowledge.
  • Disclosure
    The result of the elective process is that taxpayers have "agreed" to invest in certain tax exemptions and incentive programs, which are overseen by the IEDC and its related agencies. The goal of spending those tax dollars is to increase the tax base of Indiana through the expansion of business in our state.

    While I support disclosure of data that confirm decisions regarding appropriation of tax dollars, I cannot support disclosure of information that would discourage business from expanding in or relocating to Indiana. We must be careful of imposing our "rights" at taxpayers when it may prove detrimental to the master plan. We must judge the efforts of the IEDC and other commerce agencies in the state by their overall results, not by each individual decision they make. That is why we elect/appoint them, so they can administer the details and then report back to us on a regular basis. We are similar to stockholders in the regard that we must trust our Board of Directors and the management of the company with our investments and hold them accountable when profitability targets are not met.
    • Public Accountability and Transparency
      Disclosure of average project wage compared to average county wage, incentives per job, or some other metric should be public knowledge.

      Clearly the IEDC does not want public oversight of its effectiveness considering it wants retract promised public access to the water down State Board of Accounts audits, independent GAAP accounting audits and the non-deliberative project information.

      Current IEDC management needs to open up or be taught a lesson in court.
    • @Norm

      Can we get this article cross blogged with the Indiana Lawyer team and have some legal points in on the conversation? I would love to see how this currently fairs on the legal books and how laws play into this.

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