I’m here to testify today in support of S.1900 – An Act to Improve State Administration and Finance, which proposes a number of administrative reforms that I believe will help modernize and improve the efficiency of state government.

I’m also here to suggest a number of additional reforms offered in the same spirit that I’d like to encourage the committee to consider including in the final bill reported out of the committee.

S 1900 has been described as a “performance management” bill, with a focus on collecting and analyzing the data we need to determine how effectively each government agency is operating, and what could be done better, so that we get the best possible performance for the taxpayer.

It’s a worthy aim, and one I support whole-heartedly.

I’d suggest, however, that one of the areas of government that is MOST in need of performance management is our tax expenditure budget, and in particular the money we spend on economic development subsidies for corporations.

Massachusetts spends hundreds of millions of dollars each year on economic development subsidies – and yet legislators, the administration, and the general public often don’t have the data we need to judge the real impact of our investments.

How much are we spending?
Where is the money going?
How many jobs are being created with those subsidies?
How much are we paying for each job?
Are we getting a good return on our investment?

These should be simple questions, but the answers are usually very hard to find, if you can find them at all.

I’ve filed legislation this session, “An Act Promoting Transparency & Efficiency in our Economic Development Spending,” (S153), which would:

• Increase the efficiency of the state’s economic development agencies by making them more transparent,
• Collect the performance management data we need to make informed decisions about how to best spend our economic development dollars;
• And require a stronger, consistent clawback standard across economic development programs to get taxpayer dollars back if a company breaks its job creation promises.

I also want to note that last week, the House budget included an amendment establishing a Tax Expenditure Commission to review and evaluate the effectiveness, timeliness and public benefit of tax expenditures and create a metric for measuring their success relative to policy objectives.

The goals of this commission are similar to that of the Sunset Commission proposed in S1900; I’d encourage the Committee to consider either including a Tax Expenditure Commission in the bill as well, or expanding the purview of the Sunset Commission to include tax expenditures.

In a time of such limited resources, it is more important than ever that we understand the costs and benefits of all of our spending – including our spending on corporate subsidies — so we can make the best use of scare resources.

Thank you for your consideration of these ideas to make S1900 the best possible bill.