Legislative report: Can't tell if tax incentives are doing the job

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February 11, 2013 - 5:25pm


It’s difficult to say if a program that’s cost Nebraska more than $100 million in tax incentives is doing what lawmakers intended, a legislative committee reported Monday.

The Nebraska Advantage Act is the state’s biggest corporate tax incentive program. It’s designed to attract companies to move to, or expand in, Nebraska, by offering tax breaks if they do.

Between 2008 and 2011, 33 companies used almost $101 million worth of those tax breaks. But in a new report, the Legislature’s Performance Audit Committee says it can’t tell if the incentives are doing enough, or if the costs are appropriate.

"We just don’t know for sure whether or not they’re accomplishing what the Legislature has intended for it to do. And so I think that’s the question we’re asking," said Scottsbluff Sen. John Harms, who chairs the committee.

The report looks at one fiscal year in particular – the 12 months from July 1, 2010 through June 30, 2011 -- to try and determine how much the incentives cost, per job. It finds if you count only those incentives tied directly to payroll, the cost was about $43,000 per job. Counting other credits the same companies got, for things like buildings, computers and other equipment, each job cost nearly $235,000.

Tax Commissioner Doug Ewald, head of the Department of Revenue which administers the program, didn’t dispute those estimates. "We believe the report is factually correct with respect to the numbers that are in there," he said.

Ewald said if the Legislature wants more information, his department will be happy to provide it. Harms says he thinks incentive programs are needed, but lawmakers should take a closer look to see if the current programs are working. And he said he was surprised versions of the incentive programs geared to rural areas are getting very little use.

Also Monday afternoon, senators on the Transportation and Telecommunications Committee heard proposals to tighten the state’s seat belt laws. Currently, not wearing a seat belt is a secondary offense, meaning you have to be stopped for another offense before you can be ticketed. Harms and Omaha Sen. Bob Krist want to make it a primary offense.

Dr. Joseph Stothert, director for trauma at the Nebraska Medical Center in Omaha, supported the bills as a private citizen. "There is ample evidence that seat belt utilization prevents death and suffering by preventing severe injuries and long-term suffering," Stothert said. "This data is national, and if you look at the current mortality figures for people dead at the scene, the overwhelming majority, in some series up to and over 75 percent, are not wearing seat belts."


Seat belt use in Nebraska is currently at 79 percent, according to Beverly Reicks of the National Safety Council-Nebraska.

Sen. Lydia Brasch of Bancroft says she’s a big proponent of seatbelt use personally. But she says especially in rural communities, there’s resistance to this kind of legislation. "When we bring this bill to them, they see it as another government mandate – more government interference telling me what I must do," Brasch said.

The committee took no immediate action on the proposals.



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