Study: Idaho lags in cost-benefit analysis of tax spending

July 29, 2013 

In the first-ever study measuring states’ use of cost-benefit analysis of tax-funded programs, Idaho is among 11 states “trailing behind,” according to a report released Monday.

The study, “States’ Use of Cost-benefit Analysis: Improving Results for Taxpayers," was published by Results First, an initiative of the Pew Center on the States and the John D. and Catherine T. MacArthur Foundation.

The Pew-MacArthur study found that while all states are using cost-benefit analysis, they “vary greatly in how often they conduct such analyses, the breadth of those assessments, and how they use the results to improve government performance.”

Idaho did two such studies between 2008 and 2011, among 348 such evaluations in the 50 states and District of Columbia.

The report puts Idaho in the trailing group with Montana, Nevada, Arizona, Wyoming, North Dakota, South Dakota, Kentucky, West Virginia and South Carolina.

The study says 10 states are “leading the way:” Washington, Utah, Kansas, Missouri, Minnesota, Wisconsin, New York, Virginia, North Carolina and Florida.

Washington state is lauded in the report for developing a “Consumer Reports-style” cost-benefit model to assess and rank state programs. For example, the state says correctional education in prison offers a 19-to-1 return on investment, alternative drug sentence 15-to-1 and mental health courts 7-to-1.

Twenty-nine states and D.C. were classified as “mixed” by researchers.

“This report is intended to serve as a resource for policy leaders seeking to expand their use of cost-benefit analysis and as a baseline for future studies of states’ progress in using rigorous evidence to better inform tough budget and policy choices,” say the authors.

“The approach compares the expense of public programs to the returns they deliver, enabling policymakers to direct limited dollars toward the most cost-effective programs and policies while curbing spending on those that have proven to be ineffective.”

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