Confidentiality has been part of the site selection process for as long as I can remember. Incentives negotiations with companies still in the decision-making process often remain secret, though many states have improved reporting on completed deals. Code names for major projects are typical, with the big reveal occurring only after the decision has been made.

Now there is some pushback.

Last week’s open letter (here and here) from organizations in several states addressing the Tesla Motors gigafactory competition and request for incentives raised several issues, including a call for more upfront transparency, suggesting:

Any agreement struck must be fully transparent – no law requires you to negotiate with Tesla or any company behind closed doors. . . . We call upon our elected officials to seize this rare opportunity: talk to each other, let the public into the process . . . .

An editorial this week from a North Carolina newspaper noted:

One of the reasons no one particularly likes how financial incentives to businesses are handled is that the businesses generally want their names kept quiet until they are ready to sign a deal. . . . This benefits no one but the business, which gets to keep its government suitors guessing about what places are competing to land the business and what they are offering. . . . If governments want to jockey for position and compete for businesses by offering public money, at the very least the public has a right to know what’s being done in its name with its money.

And in Texas there have been calls for greater openness in Texas Enterprise Fund and other economic development incentive decisions. For example, this summer news organizations asked for details on the $40 million incentive grant offered to Toyota, but the Governor’s Office denied the request, noting that:

“Expansion and recruitment of businesses to our state is competitive by its very nature. Release of this information before contracts are signed or final approval is given would seriously disadvantage Texas by allowing other states to directly approach this entity with competing incentives, undermining Texas’ ability to successfully recruit the business to our state.”

The letter went on to state that the office could not release third-party information such as a contract or application, without the approval of the company or the attorney general.

Recent testimony before the Texas House Select Committee on Economic Development Incentives pointed out that allowing incentives negotiations to occur in closed session is not an immutable fact – it was added to the Open Meetings Act in 1999.

There is a place for confidentiality in the incentives process, but complete secrecy is not necessary, desirable or sustainable.

 

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