Newspaper article St Louis Post-Dispatch (MO)

State Audit Assails Quality Jobs Program; Auditor Tom Schweich Says the Number of Jobs That Have Been Created Is Overstated, and He Warns of a Potential for Abuse

Newspaper article St Louis Post-Dispatch (MO)

State Audit Assails Quality Jobs Program; Auditor Tom Schweich Says the Number of Jobs That Have Been Created Is Overstated, and He Warns of a Potential for Abuse

Article excerpt

JEFFERSON CITY - A key Missouri economic development program overstates the number of jobs it creates and is open to abuse because of poor management, a state audit says.

The scathing report, issued Monday by state Auditor Tom Schweich, takes aim at the Quality Jobs program, which has been hailed by Republican and Democratic governors alike for creating good-paying jobs with health insurance.

Under the program, companies can get state tax breaks for adding jobs that pay at least the county's average wage. The employer also must pay at least half the employee's health insurance premium.

Since the program began in 2005, the state has approved projects that were estimated to create 45,646 jobs. But, as the Post- Dispatch first reported in 2009, many of those jobs never materialized. The Department of Economic Development this year lowered its projection to about 26,686 jobs. So far, a total of 7,176 jobs have been created.

Not only does that give the public and the Legislature the wrong impression, Schweich said, the department doesn't adequately check to see whether businesses are doing what they promised.

"They basically trust the companies to self-report, and they do very little to monitor it," Schweich said in an interview.

Schweich gave the program a rating of poor, the lowest possible score. It was the first time he had assigned that rating to a state program, his office said. Since January 2011, he has given out 19 "poor" ratings, but the others went to various local entities run by cities and counties.

The Department of Economic Development disagreed with Schweich's findings. In written responses included with the audit, the agency said that while initial job projections are based on a company's "best estimate" for the next five to eight years, the department updates those estimates annually to reflect projects that failed to hit their targets.

In any event, companies don't receive tax breaks based on job projections, the department says. Firms must show that their payrolls increased before they get the tax credits and other benefits.

And based on the jobs that have been created and the money that has been invested in plants and equipment, the program is returning at least $3. …

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