Arizona Commerce Authority Given Transparency Recommendations

Arizona PIRG

On July 1st, 2011, the Arizona Commerce Authority officially will begin operations. The Authority, a quasi-public entity, will replace the Arizona Department of Commerce and dispense taxpayer-funded subsidies to private businesses. Governor Brewer and the Arizona legislature approved this change on February 16, 2011.

The Authority will be overseen by a board chaired by the Governor, but comprised mostly of corporate executives. Despite the mostly private board, the Arizona Commerce Authority will exercise control over use of public dollars, including an annual $25 million “deal-closing fund” designed to attract businesses to relocate to Arizona.

“As the Arizona Commerce Authority prepares to open its doors, it’s important that the Authority includes the highest level of transparency in its operation,” said Serena Unrein, Public Interest Advocate for Arizona PIRG.  “The Arizona Commerce Authority was created to bring more jobs to Arizona, so information on how well the Authority is meeting its goals should be fully open to the public.”

To achieve transparency for the Arizona Commerce Authority, Arizona PIRG recommended implementing these safeguards to protect the public interest:

1. Rules should prohibit companies from making decisions to hand out taxpayer-financed subsidies for their own related industries or affiliated companies.
2. All meetings of the Arizona Commerce Authority should be fully public, with agenda items published online in advance of meetings and minutes posted online. 
3. The Arizona Commerce Authority should abide by existing public open records and public open meeting laws. Authority documents should be subject to the Freedom of Information Act (FOIA).
4. The public should be allowed to see what companies receive public subsidies and the amount of each subsidy, along with the goals and benchmarks intended with that expenditure. Companies receiving public subsidies should be required to report on the number of full-time-equivalent jobs promised and actually created, along with other results promised and delivered.
5. The Authority should list in an easily accessible online format the companies claiming money through the “deal-closing fund.” Ideally, this spending of public funds would be listed at Arizona OpenBooks, the state’s official transparency website. To discern whether business is being attracted to Arizona instead of merely lured across local lines, the website should state where the businesses had been located previously. Reporting should include the actual results leveraged as a product of the grant.

“Without adequate oversight, there is the potential for waste and abuse when public funds are given to private entities,” stated Unrein. “The public has a right to know how the Authority is doling out our tax dollars.”

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