(Reuters) - Tax credits given by state governments to businesses in the name of economic development often cost too much and accomplish too little, a study released late on Thursday said.
Much of the cost increases came from permissible claims for jobs created years earlier, The Pew Center on the States said.
It singled out a New Mexico high-wage jobs tax credit as despite creating few new high-wage jobs, the report said its cost rose to $48 million in 2012 from $9.3 million in 2011.
The Pew study also criticized Louisiana drilling tax credits and renewable energy tax credits in Hawaii for dramatic jumps in cost over short time periods.
Estimating the costs of these tax incentives can be difficult, the study added, while praising programs that include built-in caps, such as California’s film and television tax credit, which is capped at $100 million per year for five years.
Pennsylvania’s film production tax credit, Arizona’s jobs tax credit and Florida’s new manufacturing incentive program also got high marks from Pew.
Reporting by Nanette Byrnes, editing by Kevin Drawbaugh, desking by G Crosse