Conducting an Analysis of Georgia’s Economic Development Tax Incentive Program

Georgia’s principal state-level economic development tax incentive program has been a set of income tax credits known as Georgia’s BEST program. Shortly after taking office in January 1999, Governor Barnes requested a study of BEST that would serve as the basis for recommending changes to it. An extensive review and evaluation of all aspects of BEST was conducted, including the effect of job tax credits on job creation. The authors found that most eligible firms did not participate in BEST, that the job tax credit created jobs, and that there were many problems with the structure of BEST. Numerous changes were proposed that were intended to better target the tax credits and to address development objectives beyond just job creation. Many of the authors’ recommendations were taken by the governor and effected statutory changes to BEST. Based on lessons that were learned or reinforced, 10 recommendations for others involved in similar projects are presented.