Notes and audio from Performance Audit Committee incentive hearing

Notes and audio from Performance Audit Committee incentive hearing

Robert Zahradnik, a business incentives expert from the Pew Charitable Trusts, told members of the Legislature’s Performance Audit Committee on Friday that Nebraska is a leader in “upfront accountability” regarding business subsidies but like other states, we struggle to know if our incentives are worth what we spend on them.

Nebraska is ahead of other states in that we require businesses to fulfill their investment and job-creation promises before we award subsidy money, Zahradnik said, but we don’t have a good way to assess whether these investments are paying off.

All incentives to some extent reward business activity that would have occurred without the subsidies, Zahradnik said, but the crucial and hard-to-answer questions are how much of that business activity would have occurred without the subsidies and at what point do incentives truly become worthwhile for a state.

States can help answer these questions, Zahradnik said, by applying regular reviews and measureable goals to their subsidy programs.

He pointed toward Rhode Island as a state that has made good progress in incentive review. The state uses a system based on a strategic evaluation schedule, metrics that measure costs and benefits and evidence-based recommendations that are integrated into the policy process.

Zahradnik’s presentation was part of a hearing to discuss the Performance Audit Committee’s third report on business incentives, which found Nebraska could benefit from the kind of regular review and assessment Zahradnik discussed. View a PDF of Zahradnik’s presentation ordownload this audio file to listen to the entire hearing.