Do tax breaks actually create jobs?
It’s a question the Unicameral wants answered.
A bill calling for the evaluation of tax incentive programs to lure businesses to Nebraska has advanced in the Unicameral.
Speaker Galen Hadley of Kearney says Nebraska needs to determine whether companies would not have come to Nebraska “but for” the incentives the state offered, adding that any company that receives a tax break will always say it was vital to its decision.
“So, what we have in developing an audit here is to try and use other metrics and other tools to try to be a surrogate for the ‘but for’ test,” Hadley tells colleagues during legislative floor debate. “Looking at growth in employment, looking at capital expenditures; looking at things that will help us decide whether or not these programs are working.”
LB 538 purports to evaluate the various tax incentive programs offered businesses by the state. Each tax incentive program would be subjected to a performance audit at least every three years.
Sen. Ken Schilz of Ogallala says it is in the state’s best interest to discover whether corporate tax breaks actually work.
“We talk about property tax relief. We talk about income tax relief. And we talk about sales tax relief. There’s only one sure way to make sure we have that opportunity to do some of those relief packages and get some of that done and that’s through growth,” according to Schilz.
Sen. Paul Schumacher of Columbus says Nebraska needs to know how effective incentives have been to lure businesses to the state and what happens when another state offers a Nebraska business incentive to move.
“These are some of the interesting issues I think we’re going to end up dealing with in the next few years as we struggle with promises to deliver tax relief and at the same time face huge expense issues with baby boomers, with prisons, with pre-school education, and with a lot of other things that are going to be sobering and very difficult for this body to juggle,” Schumacher tells colleagues.
LB 538 has advanced to the next round of debate.