States rethinking tax credits as job creation tool

September 10, 2011 - 1:05 PM

JEFFERSON CITY, Mo. (AP) — Governors and lawmakers have used tax credits for decades to try to lure businesses to their states. But officials in some states are rethinking their tax credits in light of continued budget deficits and high unemployment rates.

The tension over tax credits is particularly high this week in Missouri, where a special legislative session has convened to scale back some of the state's most costly credits in order to finance new tax incentives for specific businesses.

Democratic Gov. Jay Nixon and Republican legislative leaders contend the package has the potential to spur job creation. But other lawmakers are skeptical that it amounts to anything more than another give-away to big businesses at the expense of funding for public schools and services.