Montgomery County’s economic development incentives have fallen about 3,500 jobs short of expectations, according to a report by the County Council’s investigations office.
A report by the Office of Legislative Oversight said the county has given $25.8 million through its grant and loan program since fiscal 1996 to companies required to use the money, in part, to preserve or create jobs.
Recipients projected they would bring or keep 26,775 jobs in the county, but actual job creation and retention reached only 23,246, about 13 percent short of the goal, according to the report released Tuesday.
Data showed that recipients who met all the requirements of their grant or loan actually exceeded their job requirements, creating about 70 percent of the actual jobs, but those that fell short in other areas also fell short when it came to jobs.
Biotechnology companies had the greatest success, creating or retaining more than their required jobs. But business services and other technology companies fell as short as only 70 percent or 80 percent of their goal.
In total, the county provided more than $34 million in direct financial assistance to companies from its Economic Development Fund and $34.8 million in economic development property tax credits.
But the investigators also found that only 68 percent of 154 unique recipients under the grant and loan program were still in the county. More than half of the recipients of a Technology Growth Award were either no longer in business or have moved out of the county, the report noted.
Overall, the report found the county’s economic development incentives align with industry best practices, but investigators found there still is room for the county to improve.
The legislative oversight office conducted the report to enhance council oversight of the publicly funded incentives, according to the document.
One of the the office’s major recommendations was enhanced reporting to better understand long-term returns of the county’s investment. It also recommended annual reports on the long-term outcomes for businesses that received incentives and discussing performance guidelines with the county executive.
The office recommended the county report data on the private investments made by award recipients and differentiate between jobs created and jobs retained.
Councilwoman Nancy Floreen said she was pleased to see that the report found the county largely in line with best practices across the country.
“The bottom line is it seems to be that we are doing the right thing,” Floreen (D-At large) of Garrett Park said.
Floreen’s Planning Housing and Economic Development Committee is scheduled to discuss the report at its March 11 meeting.