A new study by the Pew Charitable Trusts titled “How States are Improving Tax Incentives for Jobs and Growth” states that Pennsylvania is “…trailing other states because it has not adopted a plan for regular evaluation of tax incentives”.
Note that this is 2017: we wrote in 2006 about economic development efforts by the state and noted a 2000 study by the PA Legislative Budget and Finance Committee that did not heap praise on Department of Community and Economic Development monitoring; the year after the Auditor General wrote about the monitoring of the Opportunity Grant program. And then we noted how there have been no reports on tax increment financing projects as required by the law because there is nothing in place to actually require information to be submitted.
The study separates states into “leading”, “making progress”, or “trailing” in terms of how well they monitor the effects of incentives handed out in the name of job growth/retention. The study notes “the leading states 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. The states that are making progress have made a plan by enacting a policy that requires regular evaluation of major tax incentives. The trailing states lack a well-designed plan to regularly evaluate major tax incentives (italics added)”.
PA is not alone in the “trailing” category as 22 other states are also there. Most of the states in the “leading” or “making progress” categories enacted laws improving monitoring and evaluation in recent years, so in some sense it is not out of the realm of possibility for PA to step up its efforts and enact a process to measure the effects of its economic development efforts.
