CHAMPAIGN, Ill. – Most states are doing a poor job tracking whether their tax breaks for businesses are actually spurring job growth, including some that have poured hundreds of millions of dollars into corporate incentive programs, even while grappling with record deficits, according to a new report.
The report released today by the Pew Center on the States found that no state regularly takes a hard look at the effectiveness of all of its tax breaks. Twenty-five states and Washington, D.C., do little if any evaluation.
Only 13 were found to be doing enough, the study found.
Information on how Maine was ranked was not available.
It’s difficult to say how much U.S. states spend, combined, on tax incentives, but they’ve become more common in the past decade, particularly since 2008, when the country sank into recession. Unemployment rose and the money available for state budgets shrank, yet researchers found the tax breaks states handed out may not have produced the desired effect.
“Given that states are rebuilding their budgets and economies in the wake of the Great Recession, these are mistakes states can’t afford to make,” Pew senior researcher Jeff Chapman said.
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