The State of Maine has examined its economic development incentive programs and found them to be a bad deal for taxpayers. The document that the following editorial is based on is Comprehensive Evaluation Of Maine’s Economic Development Incentive Programs. The editorial’s takeaway, which is embarassing to Kansas, follows:
In addition, nationwide research suggests that state incentives play a relatively minor role in attracting investment. Instead, many companies see negotiations for state incentives as a way to maximize profits for shareholders after other, more important criteria has been weighed and a location selected.
Often these negotiations pit location against location to get the best deal. In one such illustrative instance, The New York Times notes in a piece about corporate incentives, AMC Entertainment was lured by a $36 million incentive package to move just a few miles, from Missouri to Kansas.
In that case, and others like it, no new jobs are created and no new economic activity is generated. The company simply gets another tax break, paid for by taxpayers in Kansas at the same time the state is making cuts to its education budget.