Dave Heineman: "Corporate Welfare Works for Nebraska"by Kyle Michaelis
|No, that isn't a direct quote, but it's certainly the gist of Gov.
Heineman's announcement on Monday that the Nebraska Advantage tax incentive
program is a stunning success. In fact, it's so successful that it
appears likely to cost the state more than double the program's original
estimates - already somewhere in the ballpark of $600 million in lost
The Associated Press reports:
Businesses tapping the state's tax break program designed to create jobs could invest more than $4 billion over the next several years and create about 10,400 jobs....
The figures, touted Monday by Gov. Dave Heineman, represent the cumulative investment and job growth plans of businesses that have filed 116 applications for tax breaks through the end of July....
The program thus far has been more popular, and could be more expensive, than officials predicted. They had estimated that once fully operational in 2014, the tax break bill would provide an estimated $200 million a year in breaks to qualifying companies.
But the actual cost of providing the breaks under the new system, called Nebraska Advantage, could be more than double.
The total value of the tax breaks for the businesses that have applied through the end of last month could hover around $600 million. And the total payout from the state could exceed $500 million for applications from last year alone.There are a lot of questions and little evidence to support how well these sorts of tax incentive programs actually work for economic development and job creation. Nebraska Advantage does contain some reporting and assessment requirements by which we might gather some measure of its ultimate costs and benefits, but there's never any knowing which investment was actually spurred by the program and which would have occurred regardless. In the latter cases, these incentives can hardly be understood as anything but government funding of the private sector - in other words, corporate welfare.
I don't say that to demonize the program - only to call it what it is. Honestly, this might be the best thing the state of Nebraska has ever done. Or, it might be one of its worst boondoggles. The real problem is that - with Gov. Heineman - it's hard to see how we can trust our state government to do the thorough investigation and research into Nebraska Advantage to see that it's actually working to Nebraska's advantage rather than serving as a tool for corporations to take advantage of Nebraska's taxpayers.
The potential for oversight doesn't do a whole lot of good when those doing the overseeing are more interested in political victories than honest results. After a decade of mostly the same people running the show - with the legislature bending to Heineman's will so completely in the 2007 session - there just aren't enough independent voices in state government who can be trusted to serve with integrity and maintain accountability.
When we're talking about a program that hands-out hundreds of millions of dollars to corporations, that lack of accountability is very, very dangerous. In fact, it's probably a recipe for disaster.