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Wednesday, January 6, 2010 - 11:31am

Are Business Tax Breaks Working in Georgia?

Updated: 4 years ago.
The state has foregone hundreds of millions in state revenue to encourage businesses do things like create jobs, but it can't tell if it's working. (photo by Tyler Beyett)

Corporate tax breaks have cost the state hundreds of millions of dollars in revenues over the years, and there’s no analysis on whether they’re working, says the state’s auditor.

Georgia gave up an estimated $265 million from the years 2004 to 2006 to encourage businesses to do things like create jobs.

According to a 2006 report out of the Georgia Department of Audits and Accounts, the state had no way of telling if it helped Georgia back then.

And now it still doesn’t, says state auditor Russell Hinton. His agency recently did a follow up review.

“The state at the present time does not have a reporting mechanism or an evaluation mechanism,” says Hinton, “as to seeing whether or not those benefits are accruing to the state.”

Hinton says the state needs them.

Sarah Beth Gehl with the Georgia Budget and Policy Institute agrees. She says most other states already evaluate their business tax incentives and Georgia should join them.

“In state legislature right now, senate bill 206 would require such a report that these 39 other states already have,” says Gehl, “that would look at such things as the costs of these tax breaks. What are the benefits? What are we getting?"

The bill is now sitting in the state house. Some lawmakers have voiced their support for more tax incentives despite declining revenues and the lack of accountability.

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