Friday, October 31st, 2014
Half-True
Deal
The  Georgia Department of Economic Development assisted with the creation of 28,776 jobs, an increase of 29 percent from last fiscal year, and $5.97 billion in investments, a 32 percent increase.  

Nathan Deal on Monday, October 1st, 2012 in news release

Gov. Nathan Deal touts job creation, investment

Job creation has become the calling card of politicians on every level. From the president of the United States to the local city council member, all are touting their contributions to improving the economy through the most measurable way: jobs.

Earlier this month, Gov. Nathan Deal released a statement touting job creation under his administration for the fiscal year that ended June 30. This was the first such announcement for Deal, who took office in January 2011.

In the statement, Deal announced that jobs and investment generated by the Global Commerce Division of the Georgia Department of Economic Development jumped by almost one-third during fiscal 2012.

"The department reported that the 403 company expansions or locations with which it assisted created 28,776 jobs, an increase of 29 percent from last fiscal year, and $5.97 billion in investment, a 32 percent increase," the statement said.

We wanted to check the numbers. Where did they originate? At PolitiFact Georgia, we fact-check claims of others, but who at the state level fact-checks the companies’ job creation and investment claims? Is there any follow-up from state officials?

Georgia’s unemployment rate sat at 9.2 percent in August, according to the state Labor Department, above the national rate of 7.8 percent in September. (Georgia’s unemployment numbers for September are expected later this week). Georgia lost 339,000 jobs during the Great Recession, according to the Georgia Budget and Policy Institute, and it has only regained about one-third of those jobs.

During the most recent legislative session, Deal proposed a series of incentives -- some of which were approved by the Legislature -- designed to boost long- and short-term economic development. The plan included items such as removing the sales tax on energy used in manufacturing and broadening tax credits for adding jobs.
With the jobs cited in the news release, we asked the Department of Economic Development about the numbers and how they are computed. The news release includes the number of jobs that companies say they are willing to commit to, said Alison Tyrer, a department spokeswoman. The companies also determine what amount of investment the project will produce, and the state also reports that information.

Of the 403 projects worked by the state’s Global Commerce Division and mentioned in the release, 36 percent were new locations; the remaining 64 percent were expansions by existing companies.

The release did not include information regarding the duration of the projects or how many of the jobs were new vs. existing or transfers from other areas. Nor does the release mention the incentives offered at the state and local levels to lure the companies to the state and promote expansion. In articles about some of the larger project announcements over the past fiscal year, The Atlanta Journal-Constitution has reported additional facts regarding the jobs and investment.

For example, a new Caterpillar plant in Athens-Clarke and Oconee counties in northeast Georgia is listed as one of the top projects in the state in fiscal 2012. The company reported 1,400 jobs to be created and an investment in the state of $200 million.

The factory was expected to initially employ 800 employees and expand to 1,400 jobs by 2020. The higher number is used in the news release, even though those jobs will come years from now.

And a Home Depot company expansion in Cobb County for a customer support center was  reported in the release as producing 700 jobs and a $24 million investment. In news reports at the time of the announcement in November 2011, company officials said the center would open with 400 jobs and expand to 700 jobs by 2015.

Because they don’t independently track the numbers, the governor’s numbers can’t really be disputed, said Wesley Tharpe, a policy analyst for the Georgia Budget and Policy Institute. The institute has done its own analysis based on all jobs, not just those affected by the Economic Development Department, and found that Georgia has seen a net increase of 50,000 jobs during the similar time period of Deal’s release, from July 2011 to July 2012.

Without including the full information regarding incentives and job and investment results, releases such as those from Deal and other elected officials are "just fluff without any supporting evidence," said Greg LeRoy, executive director of Good Jobs First, a nonprofit, nonpartisan policy center promoting corporate and government accountability in economic development.

Two years ago, Good Jobs First conducted a 50-state examination of state’s economic development transparency. At the time, Georgia was one of 13 states plus the District of Columbia to receive a zero rating because they did not report and evaluate the outcomes of economic development deals and spending. The organization plans to update the study next year.

Within the Economic Development Department, the state does release information on incentives when required, Tyrer said. The department recommends grants for certain companies and projects that are then tracked by the Department of Community Affairs. Job tax credits are monitored by the Georgia Department of Revenue when companies report the jobs numbers on their annual tax forms.

The jobs and investment claims in the news release include information about the total number of jobs created during fiscal 2012, which ended June 30. While the jobs gains are admirable, the numbers do not tell the full story.

The numbers included are provided by the companies. They are not from independent analysis or state Economic Development Department examination. And many of the promised jobs and investments extend beyond the noted fiscal year -- they extend over  the course of several years.

That critical context is needed to move this item higher on the Truth-O-Meter.

We rate the statement Half True.