Questionable stimulants: Does 'economic development' work?
A performance audit of the state’s Division of Economic Development found many problems, including the absence of any process for measuring whether many of the state’s economic development activities are effective. Fittingly, Gov. Maggie Hassan left on an economic development mission to Turkey before presenting a plan to address the audit’s findings.
The audit, by the Legislative Budget Assistant, ought to give legislators pause regarding the state’s ability to manipulate the economy. It found that although the state offered tax credits, business assistance services and other economic development services, the state does not know if it is getting a return on the so-called investment.
For instance, the state offers a $1,000 per job tax credit for full-time jobs created in Coos County. The auditors found that only a third of the companies that received the credit said it prompted them to create a job they would not have created otherwise. And controls were lacking. The state awarded $875,750 in tax credits businesses were not eligible to receive.
Every year, legislators try to create new “economic development” initiatives, though we don’t even know if the current ones are working. The taxpayers would be better off if legislators reined in these initiatives instead of expanding them.