New Report Says Missouri Extending Tax Credits The Right Way

Dec 9, 2015

A report out this week examining the effectiveness of various state tax incentives gave top marks to the Missouri Works program.

Josh Goodman, senior researcher at the Pew Charitable Trusts, says in state after state, the costs of new tax credits and incentives have created budget problems.

But he says states like Missouri that require businesses to prove they’re creating jobs before getting a tax break are on the right track.

“Having that performance-based model really avoids the worst-case scenario,” Goodman says, “which is that you provide a lot of incentives, they cost a lot of money, and then the state doesn’t get anything in return for that investment.”

There is a risk that states that make their tax credits performance-based will not keep track of their obligations and build up a big liability, says Goodman.

“But Missouri has a detailed process for tracking both the cost of its incentives and future authorizations,” he adds. “That’s something Missouri state government is doing that other state governments around the country could really learn from.”

Goodman looked at 20 states for his report, but not Kansas. He says in 2012 Kansas wasn’t regularly evaluating major incentives, but there had been one-time reviews of particular programs.

Elle Moxley is a reporter for KCUR. You can reach her on Twitter @ellemoxley.