Even those jobs created from tax expenditures often fall short of any measure of good jobs. Tax breaks intended to help blighted, urban areas are often diverted to suburbs. Even when companies do locate in economically underdeveloped areas, wages and benefits are often well below the state s median earnings. In addition, there is evidence across many states that after receiving taxpayer largess, subsidized businesses are using discriminatory practices that violate federal fair employment rules. It is just plain good government to ensure that tax expenditures are spent wisely and well.
Citizens rely upon elected officials to be fiscally responsible with taxpayer dollars.
Tax breaks and subsidies should be at least as well-scrutinized as line items in the state budget. But they are not. Some states and local jurisdictions are beginning to institute fiscal accountability for tax expenditures. 4 Job quality standards promote fiscal responsibility, since they help avoid the phenomenon of taxpayers subsidizing poverty-level wages with food stamps, Medicaid and the Earned Income Tax Credit. Fiscal accountability legislation ensures an annual assessment of the effectiveness and cost of tax incentive programs.