States target offshoring - again

The notion of offshoring jobs or dealing with vendors that do so is still irking many state government officials.

Colorado this week became yet another state to see a bill before its legislature that would cut tax breaks and other incentives to companies in Colorado that offshore workers.

According to an Associated Press report, 36 states considered legislation aimed at limiting offshoring last year. Laws, however, were only passed in two of them: Tennessee and Illinois. So far this year, 15 states besides Colorado are considering such bills, the AP says.

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The notion of offshoring jobs or dealing with vendors that do so is still irking many state government officials.

Colorado this week became yet another state to see a bill before its legislature that would cut tax breaks and other incentives to companies in Colorado that offshore workers.

According to an Associated Press report, 36 states considered legislation aimed at limiting offshoring last year. Laws, however, were only passed in two of them: Tennessee and Illinois. So far this year, 15 states besides Colorado are considering such bills, the AP says.

A proposed law in South Dakota would bar companies that outsource from getting state aid. New Hampshire lawmakers are looking at keeping track of how many jobs are outsourced and not doing business with any companies that ship more than 50 jobs overseas.

Many states are under pressure to cut costs because of tax revenue declines and have to balance the fiscal responsibilities of offering services versus the cost of such service. States can often save money if they hire contractors that send IT support work overseas because they charge lower rates than those who hire only U.S. workers. Many states have laws that require them to choose the lowest-price bidder on all of their contracts, not just for IT services.

Typically state legislators also have to battle with business interests that fight legislative efforts to slow or eliminate offshoring. Last year more than a dozen major trade groups - including the U.S. Chamber of Commerce, the Business Roundtable, and others - formed the Economic Growth and American Jobs Coalition to lobby against these bills.