HARRISBURG – While Pennsylvania’s hallmark economic development investment program is more accountable to commonwealth taxpayers and has improved its record of success in creating new jobs, it will continue to implement improved controls and monitoring that have been recommended by a new state audit, Department of Community and Economic Development Secretary Dennis Yablonsky said today.
The opportunity grant program was established in 1996 to secure job-creating economic development projects that preserve and expand existing industries. The report released today by the state’s auditor general affirms the program’s success in creating and retaining jobs. It also offers suggestions to strengthen its role in making Pennsylvania a leader in business growth.
Under Gov. Edward G. Rendell’s direction, Yablonsky said the opportunity grant program is more successful and accountable because:
Grants awarded since Rendell took office have resulted in nearly 15,000 new jobs and almost 34,000 retained jobs – a 98 percent overall program success rate; Taxpayers are getting better results for each dollar invested. The cost-per-job has been reduced from $919 in prior administrations to $744 under Rendell – a 19 percent improvement; Grants have been able to leverage $2.1 billion (115 percent of projected leveraged capital investment); and Companies that do not meet their job creation targets are increasingly being forced to repay grant funds to taxpayers. The administration’s emphasis on enforcement has resulted in $10.5 million in collections since 2003. DCED has collected more in each year of the Rendell administration than in all years of prior administrations combined.
“This audit confirms what we and Pennsylvania’s job-creating businesses have known for several years – that the opportunity grant program is an invaluable tool for growing Pennsylvania’s economy,” Yablonsky said. “And we’re going to use many of these suggestions to make a good program even better.”
Among the valuable suggestions DCED plans to implement is early monitoring, which will enable the department to provide greater technical assistance to grant recipients and to improve its ability to recover taxpayer funds in the event that a grant does not succeed.
“In many cases, the opportunity grant program creates a ripple effect in the supply and service chain that spurs additional investments and jobs, producing even greater economic development benefits for people and communities throughout Pennsylvania,” Yablonsky said.
“If you measure the success of the program by the return on investment, consider that each dollar invested by the state has resulted in the investment of $46 private dollars toward economic development efforts in the commonwealth,” he said. “This has far exceeded the 4:1 match required of grant recipients.”
Yablonsky echoed the auditor general’s own conclusion that the program “is a valuable one that has become even more significant because of today’s competitive business climate.”
Five of the auditor general’s recommendations are already part of the department’s oversight of the opportunity grant program, which employs best practices to ensure accountability to Pennsylvania taxpayers.