Pennsylvania taxpayers may never know what Keystone Opportunity Zones cost or accomplished

The original Keystone Opportunity Zones expired Dec. 31, but wealthy firms, such as Dechert L.L.P. in the Cira Centre and Urban Outfitters Inc. at the Navy Yard, remain eligible for city and state tax breaks until 2018.

If the state Department of Community and Economic Development's performance thus far holds, taxpayers may never get a clear sense what the Keystone program cost and what it accomplished.

A 2009 report by staff of the General Assembly's joint Legislative Budget and Finance Committee found that "serious deficiencies in existing program data prevented a comprehensive and quantifiable assessment of the overall operation and effectiveness" of the program.

Asked whether economic-development officials had made the recommended changes to their oversight of the Keystone program, such as the establishment of standard definitions for "job creation" and "capital investment," Phil Durgin, executive director of the Budget and Finance Committee, responded: "They said they had, but we haven't followed up to see if they have."

The Community and Economic Development Department said it had addressed some of the 18 specific recomendations made in the committee's report, but it remains difficult to get accurate information. Neither the committee's chairman, State Sen. John Pippy (R., Allegheny), nor the committee's secretary, State Rep. Robert Godshall (R., Montgomery), responded to requests for comment on the program.

A longtime observer of economic-development efforts by the state, Stephen Herzenberg of the Keystone Research Center, a research and policy-development institute in Harrisburg, said there was a lesson to be learned from the Keystone Opportunity Zones.

“If you’ve got a tool that is difficult to implement well and in a nuanced way, if it’s not realistic that you can implement it in a nuanced way, you shouldn’t use this tool,” Herzenberg said. “The state should go back to the basics.”