Lincoln Journal Star: Toward Smart Business Incentives

The state is making important progress toward understanding how its tax incentive programs for business compare with other states.

The report issued recently by the Performance Audit Committee, whose chairman is Sen. John Harms, compared Nebraska programs with nine other states.

Now, as Harms said, it's time for the Legislature to take the next step -- developing tools for measuring how the economic benefits to Nebraska compare to the costs.

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Nebraska is not alone in its failure to adequately measure the effectiveness of its tax incentives.

A report issued last year by the Pew Center on the States put Nebraska in the middle of three categories on the question of whether states had taken basic steps to supply policymakers with good information on whether their economic development programs were delivering a strong return on taxpayer dollars.

The Pew report said 13 states were leaders in generating those answers. Nebraska was among 12 states with mixed results. The remainder of the states trailed behind.

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By developing measurable benchmarks, state policymakers can identify what is working and what is not and discern trends that signal when change is needed. Regular evaluations on the effectiveness of tax incentives will enable Nebraska to step up its game.

Read the full editorial at journalstar.com.