Some States Spend Billions on Economic Tax Incentives for Little or No Return

Source: Eric Pianin, Fiscal Times, May 7, 2017
 
By one estimate, state and local governments spend at least $45 billion a year on tax breaks and other incentives to lure or keep job-producing businesses and plants in their jurisdictions. … But while these tax credits, exemptions, and property tax abatements are popular tools to create jobs, attract new businesses and strengthen the local economy, they also constitute high-risk investments that can squander billions in tax dollars without always paying off.  A new study by the Pew Charitable Trusts offers provides a wide-ranging look at the way many state officials handle these costly programs in recent years.  While the ultimate success of these incentives often hinges on good planning by state officials and follow-up measurements of the impact and efficacy of the programs, Pew researchers found that many states have fallen well short of what was needed.  Indeed, the study found that 23 states either lack a smart evaluation policy or have had a policy in place for five or more years that has not proven effective in measuring impact or adequately informing state lawmakers and other policy makers of what needed to be done. …

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