Tax Credit Programs in Missouri: Projected vs. Actual Results
According to a recent AP story by David Lieb:
[Gov. Jay] Nixon’s main evidence is anecdotal yet tangible. He cites the decisions of a dozen specific businesses to add employees in Missouri. And he backs that up with statistics showing general growth in employment over the past six months.
When comparing the past three months or 12 months _ instead of six _ Missouri’s employment remains down. And a leading economic survey shows Missouri business growth may actually be waning.
But Nixon has been pumping up the positives, traveling to towns across Missouri to join businesses leaders in announcing the addition of anywhere from a few dozen to a few hundred employees. He’s attended five such announcements in the past five weeks and a dozen in the past four-and-a-half months.
The governor did exactly this in his opening remarks at the Tax Credit Review Commission last week. He cited the Perryville plant, the $5 million in state tax credits that it was recently given, and the 400 jobs that it is projected to generate. Unfortunately, he’s far from the only policymaker doing this in Missouri. Last year, for example, Saint Louis’ mayor likely used the projected amount (note: not actual amount) of economic activity generated from the film Up In The Air as a demonstration of its supposed success.
Why doesn’t the governor cite a program that has been in progress for a period of time? (I suspect that it may be because these programs aren’t working.)
I realize that I shouldn’t be surprised when a politician spins statistics in an effort to persuade the public that his policies are working. Politicians are self-interested, and they will say and do whatever it takes to get reelected. However, I find it misleading to herald the number of projected jobs and projected economic activity as evidence for success. When evaluating the success of tax credit programs in Missouri, policymakers should instead consider whether any jobs or economic activity have been generated by programs in progress, not those that were very recently authorized or issued.