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Overall climate more effective than targeted business incentives
It's like a nuclear standoff, one official observes; "Unless everyone stands down, we've got to compete."
State Sen. Galen Hadley of Kearney was refering to the Nebraska Advantage Act, which offers businesses tax breaks for creating new jobs.
The only problem is, the law doesn't include a mechanism for determining whether it works.
By official counts, it has created about 7,100 jobs since it went into effect in 2006, at a cost of $412 million in tax credits, according to the Nebraska Department of Revenue.
But the state's Performance Audit Committee concluded in February that, with no way to judge whether tax incentives have succeeded in bringing new businesses, the state is spending anywhere from $43,000 to $235,000 for each new job created by the Advantage Act.
Earlier business incentives have been successful for McCook, helping, for instance to bring one of our largest employers, Valmont, to our community.
Other efforts have proved less successful, and other taxpayers have been forced to pick up the slack when jobs fail to materialize.
Yes, we need to compete with other states when it comes to business incentives. But government has too often proved to be a failure at venture capitalism.
It is far better that we do everything we can to reduce taxes and increase governmental efficiency to reduce the overall drain on economic activity, rather than target specific enterprises that may or may not prove successful.