The Pew Charitable Trust recently released a report entitled “How States Are Improving Tax Incentives for Jobs and Growth.” The report cites that “In the last five years, 27 states and the District of Columbia have made progress in gathering evidence on the results of their economic development tax incentives. Ten of these states are leaders in tax incentive evaluation.” The state of Oklahoma and its business incentives landed among those 10, alongside Florida, Indiana, Iowa, Maine, Maryland, Minnesota, Mississippi, Nebraska and Washington.
According to the report, these states “rigorously measure the economic and fiscal impact of their programs” and have “well-designed plans to regularly evaluate tax incentives, experience in producing quality evaluations that rigorously measure economic impact and a process for informing policy choices.”
Oklahoma enacted tax incentive evaluation laws in 2015. These laws were proposed by Oklahoma Governor Mary Fallin in her 2015 State of the State address.
“It is critical for us to monitor and review the incentives we offer,” said Fallin. “I am confident that our incentives are good for Oklahoma, but it is up to us to remain diligent in ensuring that the programs, as well as their requirements and execution, are beneficial to the state of Oklahoma in the form of new jobs and new investment.
The study looked at three criteria in their assessment: Make a plan; measure the impact; and inform policy choices. Based on the research, states were rated as leading, making progress or trailing. Seventeen states were categorized as “making progress” while 23 were trailing because their “either lack an evaluation policy or have had a policy in place for five years or longer that has not been effective in measuring impact or helping lawmakers improve programmatic effectiveness.”
“Not everyone sees eye-to-eye on policy, specifically when it comes to incentives. However, we have developed a system for review and evaluation that helps ensure that the incentives we offer businesses are working for our state as much as they are working for those companies,” said Deby Snodgrass, Secretary of Commerce and Tourism. “Through our processes, we have taken into account a range of perspectives and made progress toward fixing or eliminating incentives that are not working positively for the state.”
To view the full report, visit http://www.pewtrusts.org/en/research-and-analysis/reports/2017/05/how-states-are-improving-tax-incentives-for-jobs-and-growth.