States also are looking at reforming their incentive programs or attaching more strings to them. In Nebraska, which has been offering businesses income- and sales-tax credits since 1987, the legislature is adding a requirement that companies getting the break pay workers at least $8.25 an hour. Other changes expected to pass include requiring that companies flouting environmental or labor laws repay their tax credits, and a disclosure provision aimed at making it easier to track how much in credits companies are given and how many jobs they create in exchange.
Disclosure is key to reforms expected to pass in Illinois, where Motorola closed a cellular phone plant in April. Just nine years ago, Motorola played Illinois against Wisconsin in competition for the plant, winning $36 million from Illinois in tax credits and road improvements. Now state Representative Jack Franks is pushing for tighter disclosure of tax breaks, and for so-called "clawbacks" requiring companies to repay the state if they leave. "If we make this kind of investment," Franks says, "we have a reasonable expectation that the employer will stick around."