Kentucky wants more secrecy for the public incentives it offers corporations
A bill pending in the Kentucky House would punch new holes in the state’s Open Records Act, making it harder to follow public incentives offered to companies by the Economic Development Cabinet.
House Bill 387, sponsored by state Rep. Jason Petrie, would create additional exemptions in the open records law to prevent several categories of information from being released to the public.
Among the proposed exemptions: the identities of shareholders in a company that gets public incentives; the business plans of such companies; records about public incentives that were offered but not awarded; and, most broadly, “information declared confidential” by the Kentucky Economic Development Finance Authority in administrative regulations to be written sometime in the future.
“If this bill passes, we the people will lose every right to oversee how economic development works in this state and how our public incentives are awarded,” said Amye Bensenhaver, a former assistant attorney general who is an authority on Kentucky’s open records and open meetings laws.
“We want to attract business to Kentucky, and we sometimes feel like we need to offer them incentives, like tax breaks or some other assistance using public dollars,” Bensenhaver said. “But at the same time, we need to hold them accountable, which means we need to understand the terms of the deal and whether they’re honoring it.”
Petrie, R-Elkton, declined to offer much explanation for his bill in a brief interview Friday outside the House chamber.
“I have no particular event that I am aligned on or motivated by,” Petrie said.
But Jack Mazurak, spokesman for the Economic Development Cabinet, confirmed that the cabinet requested and helped write the bill.
“We’re asking for just the amount of change that we need to be able to do our jobs correctly while still maintaining the necessary level of transparency,” Mazurak said.
Among other things, Petrie’s bill would put an end to pending court battles by news organizations trying to learn the identities of shareholders in Braidy Industries, a proposed $1.68 billion aluminum mill near Ashland that is getting many millions of dollars in state investment and other public incentives, and details about the city of Louisville’s failed bid for Amazon’s second headquarters.
More than most state agencies, the Economic Development Cabinet requires a certain level of discretion in what it reveals, Mazurak said.
“If we had to provide publicly the incentive offer that we’re making to companies that decide whether or not to come here, that tips our hand, right?” Mazurak said.
“That tips our hand to every other company that might want to come here,” he said. “The next company will say, ‘Hey, we want the same deal you offered to Company XYZ.’ It’s like asking (University of Kentucky basketball coach John) Calipari to post his playbook online.”
The language in Petrie’s bill allowing for any additional economic development information to be declared confidential in the future would require legislative approval during the administrative regulation review process, Mazurak said. That provision was added to give the state the flexibility it might need in avoiding public disclosures down the road, he said.
“We will use that extremely judiciously, and it is not being created with any particular content in mind,” Mazurak said.
Another section of the bill would exempt records about companies locating, relocating or expanding not inside Kentucky but in another state or geographic entity with which Kentucky “had a reciprocal economic development agreement.” Mazurak said that is meant to cover cross-border economic development deals in places like Ohio, where many Kentuckians could commute.
“Obviously, we would rather land a company here,” Mazurak said. “But if we’re not going to land it in Kentucky, we would rather help it go to Cincinnati than see it go to Texas where it doesn’t bring us any jobs at all.”
Bensenhaver said there already are exemptions in the Open Records Act to shield companies that get public incentives. One such exemption covers “proprietary” business information that would give an advantage to their competitors, such as sales data. Another exemption includes records revealing the prospective locations of companies that have not committed to locating, relocating or expanding in Kentucky.
“The current exemptions have been adequate to address legitimate concerns,” Bensenhaver said. “It seems to me that what they’re trying to do now, with this bill and with others like it, is to wipe the slate clean on the Open Records Act so they can close the door entirely on the public’s right to know.”
Petrie’s bill has been assigned to the House Committee on Economic Development and Workforce Investment.
