Tracking Tax Incentives Effectiveness

The Oregon Center for Public Policy (OCPP) has a fascinating article (CenterPoints, July 2006) advocating the creation of a database that details the tax breaks given to companies, the job commitments the companies offer and the performance towards meeting these commitments, including the salary of the positions created.  This type of database has already been created in Illinois and is called the State of Illinois Corporate Accountability database.  For example, if you look the 2005 progress report for ISG Steel Group, the database shows that the company received an Enterprise Zone Expanded M&E Sales Tax Exemption for $158,364 and a Large Business Development Assistance Program award for $500,000 with the promise of creating 200 Technician jobs paying on average $38,556 per year.  The report shows that not only were more Technician jobs (447) created, they were slightly higher paying on average ($39,995 per year), more Managerial, Administrative and Specialist jobs were created as well.  While in this case, the company exceeded the projections, the database can also show when companies fall behind their commitments and allow the public the knowledge of this in detail.  It is an excellent way to bring about corporate accountability for companies receiving tax breaks as well as accountability to the politicians responsible for giving tax credits.  It is a way to use the internet to increase government accountability and should be adopted by every state.