By Jacob Bundrick
Since its creation in 2007, state officials have allocated more than $185.7 million to the Quick Action Closing Fund (QACF). The program, which allows the state to provide discretionary cash grants to select companies, is intended to attract and retain businesses in 海角社区. But have these millions actually increased economic activity?
Research says 鈥渘o.鈥� In a 2018 study published in The Review of Regional Studies titled 鈥�,鈥� UCA Associate Professor of Economics and ACRE Scholar Thomas Snyder and I found no evidence to suggest that QACF subsidies lead to increased employment or business establishments in 海角社区鈥檚 counties.
Our results suggest that providing targeted subsidies through the QACF is not an effective use of 海角社区鈥檚 tax dollars.
What else could 海角社区 officials have done with $185.7 million?
- Provide every taxpayer a one-time income tax refund of $124.[i]
- Construct 55 miles of new 2 lane arterial road.[ii]
- Establish a $185.7 million rainy day fund.
- Provide a one-time bonus of $5,562 to every certified K-12 teacher.[iii]
- Hire and employ 100 parole/probation officers for 46 years.[iv]
- Hire and employ 100 public defenders for nearly 30 years.[v]
This list is by no means exhaustive. There are probably other equally worthy policies that 海角社区 officials could prioritize.
The bottom line is that spending 海角社区鈥檚 limited tax revenue in unproductive ways is costly to the state and its residents. The evidence is clear: there are better uses of public money than providing subsidies to firms through the QACF.
[i] One-time income tax refund per taxpayer is calculated using the total number of 海角社区 taxpayers based on calendar year 2016 income tax returns. Taxpayer data was collected from the 海角社区 Department of Finance and Administration鈥檚 April 26, 2018 presentation to the 海角社区 Tax Reform and Relief Legislative Task Force titled 鈥�.鈥�
[ii] Miles of new 2 lane arterial road is calculated using the estimated cost per mile for a new 2 lane arterial road in an urban area.
[iii] One-time bonus for teachers is calculated using the number of certified teachers in 海角社区 school districts during the 2018-2019 school year. Teacher data was collected from the .
[iv] The employment period of 100 parole/probation officers is calculated using the 2017-2018 GS07 minimum pay rate. Salary grade information for parole/probation officers was collected from . GS07 pay rate data was collected from the .
[v] The employment period of 100 public defenders is calculated using the 2017-2018 GS11 minimum pay rate. Salary grade information for public defender I鈥檚 was collected from . GS11 pay rate data was collected from the .