Business Incentives

A report released today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC, says that states have made a lot of progress when it comes to the transparency of economic development subsidy deals, but more work is needed. The report found that all but four states now post at least partial information online showing which companies are receiving economic development subsidies—double the number of states that were doing so when Good Jobs First started tracking them in 2007. However, the quality and depth of that online information varies across states.  The report ranks Illinois and Michigan the highest among all the states.

A group of legislators and other state leaders thinks it’s time that states take a new look at how they’re conducting economic development. “We really believe in having a larger pie instead of keep slicing smaller pieces,” said Gynii Gilliam, Idaho’s chief economic development officer. She was speaking at the session “Economic Development After the Recession” at the recent CSG 2013 National Conference in Kansas City, Mo.

Each year, states spend billions of dollars on tax and financial incentives with the hope of spurring job growth. Research suggests incentives have increased in both frequency of use and size over the past 40 years, with some deals worth over $1 billion each. In addition, some states are using incentives to engage in a bidding war with other states, offering increasingly lucrative deals for existing companies to relocate from one state to another.

A new law taking effect today in Missouri consolidates four existing incentives into a new program called “Missouri Works”. The program provides incentives for business growth, economic development and worker training programs. According to the Missouri Times, more than 600 experts in the areas of business, labor, education and economic development provided input into the development of Missouri Works. 

According to the Courier Press, a new state law – which took effect July 1 – gives the public easier access to information about companies receiving state incentives in Indiana. The law requires the state’s economic development agency (the Indiana Economic Development Corp.) to provide information about business incentive agreements on a secton of its website called the “Transparency Portal”. The information includes things like what types of incentives the company is eligible to receive; the financial value of these incentives; the company’s expansion plans and incentives paid to date. Specifically, the law, SB 162, requires the IEDC to include in its annual compliance report aggregate information on: