The National Conference of State Legislatures (NCSL) recently hosted the annual Roundtable on Evaluating Economic Development Tax Incentives.
NCSL, with the support of The Pew Charitable Trusts, brought together a great group of economists, auditors, analysts, researchers, economic developers and consultants who all share an interest in improving our understanding of how tax incentives work and illuminating their impact on state budgets and economies.
The session themes showed just how far tax incentive evaluations have come over the last 8-10 years. In the early years of the roundtable, much of our time was spent figuring out how to obtain the basic data needed to conduct an evaluation and what, exactly, an incentive evaluation should address. This year, speakers talked about:
- Cases and considerations for selecting economic modeling tools
- Using artificial intelligence in evaluations
- Pros and cons of the synthetic control method for evaluations
We also heard an excellent panel discussion on evaluating our own evaluation processes. Speakers provided some interesting retrospectives on how evaluation efforts have become institutionalized and are yielding real-world policy changes that improve tax incentive programs. And, embedded in several of the discussions, is the fact that evaluations have spurred significant improvements in data collection and management in ways that have increased both transparency and accountability in incentive use.
As always, I am so impressed by the high quality evaluation work being conducted across the country. Please see the NCSL State Tax Incentive Evaluations database for examples and Pew’s Economic Development Incentives Evaluation Toolkit to learn more.
Photo: This image depicts how AI could adapt to an infinite amount of uses. It was created by Nidia Dias as part of the Visualising AI project.
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