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Are We Getting Our Money’s Worth in Job Creation Dollars?

Return on Investment (ROI) is a simple concept, meaning: What are we getting for the money we’re spending?

Last year, the quasi-public state agency, Arizona Commerce Authority, was given more than $30 million in taxpayer dollars to create and retain high quality jobs. This year they’re requesting a little less, but still substantial, $26.8 million.

What has been the ROI? According to a recent Arizona Auditor General report, it’s hard to tell, but what we can tell is that it falls far short of expectations. In fiscal year 2014 (the period covered by the audit), $4.3 million from the Arizona Competes Fund (known as a “deal-closing” fund), was awarded to four different companies. That $4.3 million got Arizonans a commitment from those companies to create a little over 2,000 jobs.canstockphoto10794492 (1)

Note the word “commitment” versus “created.” The Auditor General noted the difference and cited that as one flaw of the Commerce Authority report that is supposed to give Arizona taxpayers a summary of what was done with their money. So far, only 257 jobs have been created out of the over 2,000 committed from last year’s awardees.

Yet another problem noted by the Auditor General is that “although statute requires the Authority to report median wages, it reports average wages” instead. An average of wages could be easily skewed by one high paying job, whereas a median wage is the middle wage of all the jobs created. So, without a report on the median wage, we don’t know the quality of the jobs being committed by these companies.

The lack of accountability is troubling, as it’s not clear if Arizona taxpayers are getting an adequate ROI based on what is reported by the Authority. As the Auditor General concludes: “Without clear information about the State’s return on investment, it may be difficult for decision makers to make informed decisions about Arizona’s economic development activities.”

In reviewing the reports from the Arizona Commerce Authority, we found that three years into their five year plan to create 75,000 higher wage jobs, companies had committed only 5,846 jobs. Fewer than half, 2,310 positions, have actually been created.

2 Responses to “Are We Getting Our Money’s Worth in Job Creation Dollars?”

  1. Rosemarie says:

    In the private sector this translates to => you’re fired.

  2. Rosemarie says:

    56.8 M for last two years. 5,846 jobs out of five year plan of 75,000
    If this were private sector it would have been moth balled a long time ago.
    ROI ?

    Grass roots effort to defund? Redirect a portion to grandparents stipend?

    Create a rainy day fund so when DCS drops three children off without food or clothes at grandpa in Wickenburg, who is probably scared out of his mind, there is an emergency rainy day available.

    See what Governor Ducey’s suggestions are on how to care for a child for 75.00 a month?
    No ice cream in that budget.

    Governor Ducey’s has directed DCS to find kin to save costs. Cutting social services to save just under 4M… REALLY!!!

    Latest stats indicate just shy of $4,000 per month per child in a group home situation.
    What if altruistic grandparents say no I can’t take care of these children without resources…

    The Grandparents raising grandchildren experience experience financial hardship keeping children out of the system.
    Instead of being recognized for saving these children coming out of terrible back stories we are being taken advantage of.

    Respectfully,
    Rosemarie Jauch @ 602-663-7876

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