Department of Economic Development
Economic Development Zone
Program Under the economic development zone program, businesses in
economically distressed areas called economic development zones are given tax credits and
other financial incentives in return for a commitment to create or retain jobs. About 1,100
businesses are certified to participate in the program in 40 economic development zones. The
program was created in 1986 and is overseen by the Department of Economic Development.
We examined the Department's administration of the program and found that, despite
legislative requirements to the contrary, the Department has not taken the actions necessary to
determine whether the program is accomplishing its objectives. The Department has neither
established a system nor collected the data needed for making this determination. The
Department also does not collect data relating to the financial benefits given to businesses
participating in the program. As a result, it is not known whether program benefits exceed
program costs. In addition, businesses may receive financial benefits from the program
without fulfilling their commitment to create or retain jobs. The weaknesses we identify in
Department oversight are caused, to some extent, by legal provisions denying the Department
access to certain information maintained by the Department of Labor and the Department of
Taxation and Finance.
For a complete copy of 95-S-78 click here.
For a copy of the associated follow-up report click here.
For a copy of the 90-day response click here.