Introduction Incentive programs take a variety of forms and are applied by either state or local governments to encourage the relocation, expansion, or creation of businesses in a given area. Although, over time, they have been used by more and more states and localities, and with more or less success, there remains considerable opposition to the use of incentive programs. Detractors of cash or tax abatement programs offer the following arguments. Incentive payments

◾ are costly and must be taken from other needs in the community; ◾ are payments taken from the tax base that has been collected by those in the

community for many years who will not receive the same advantages; ◾ are hard to stop once they have been initiated because each successive busi-

ness will want a similar deal to the last one offered; ◾ have not historically always been successful in delivering more in returns than

the original expense (or, in the case of tax abatements, the foregone revenues);

◾ are often granted to private businesses that do not actually need such relief; ◾ are frequently driven by a company’s consultants, who derive personal ben-

efits from obtaining larger grants or abatements on behalf of their clients.