Did Tax Credits for Businesses Help or Harm: Who Knows? No Analysis Has Been Done on Whether They Benefited State at All

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ATLANTA - No one knows if the $265 million in taxes Georgia gave up over three recent years brought the state any benefit, and the state's in-house watchdog agency says nothing has been done about it since the first report in 2006.

At issue are 13 credits companies can use to save what they would otherwise owe on their firms' income taxes. Legislators voted on them with the argument that they would boost employment to the state by encouraging out-of-state companies to locate here and local companies to create new jobs.

In a state that prides itself on being friendly to business, enacting tax credits seemed logical to a majority of lawmakers. The problem is, nothing has been done to determine if they really work.

That question could be more critical today than in 2006 when the Georgia Department of Audits and Accounts, which monitors the performance of government from the inside, released its initial report on the tax breaks. At the time, the state budget was flush with funds and on the way to building up a $1 billion in reserves.

Now, the state budget that legislators will begin tackling next week when the General Assembly convenes has little in reserves and could require about $2 billion to be cut in spending from what was available in 2006. …


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