Media Coverage

Bangor Daily News: After Years in the Dark, Data Will Help Policymakers Judge Tax Incentives

A provision in the state’s new, two-year budget charges a group of lawmakers, economists, tax experts and business representatives with combing through Maine’s tax laws and coming up with $40 million in additional tax revenue by eliminating or reducing tax breaks, credits and exemptions. The panel will also be asked to develop a regular evaluation process for those incentives.

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“I believe all of these programs were in put in place with good intentions, to spur economic development, to create jobs, to maintain and protect jobs or to change behavior for the better,” said state Sen. Emily Cain, D-Orono, who proposed legislation during the recently completed session to institute a regular review for the state’s so-called tax expenditures. “What we don’t do enough of, or in some cases, do any of, is stop and say, ‘What are the individual goals of that program, and what is the outcome?’”

Not alone

Maine isn’t alone in taking a largely hands-off approach to judging the performance of programs meant to spur economic growth through the tax code.

“They’re created very piecemeal and on an ad hoc basis,” said Robert Zahradnik, an expert on economic development tax incentives with the Pew Charitable Trusts. “Over time, states begin to have more and more tax incentives and, sometimes, they don’t realize how many they’ve put in place.”

And it hasn’t been common for policymakers to put mechanisms in place to review incentives regularly and determine whether they’re meeting their original intent, Zahradnik said.

In a 2012 review of state policies, the Pew Charitable Trusts labeled Maine one of 25 states “trailing behind” in terms of regularly measuring the economic impact of different tax incentives and using that information to inform policy decisions.

Read the full article at bangordailynews.com.

Projects:
Economic Development Tax Incentives
Issues:
Tax Incentives
States:
Maine
 
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