Dear Members of BMG Community:
The state budget recently passed by the legislature and signed by the Governor included a provision on tax credit transparency. This provision relates to specific credits, such as the historic preservation and film industry tax credits. These credits are refundable or transferrable, essentially acting as a state grant. But unlike typical grant programs, details about tax credits are considered private information. In other words, companies that receive tax credits are treated differently than companies that receive state grants. Does this make sense?
The transparency provision originally included in the budget mandated that those receiving these credits report certain information back to the state, including the identity of the corporation receiving the credit and the employment data to show how many jobs the credit allowed the company to create.
Unfortunately, the budget that eventually emerged from the conference committee changed the transparency provisions in such a way as to remove some critical reporting details. The omission of this important information – such as the identity of the company receiving the credit – will makes it virtually impossible for the state or the public to determine the effectiveness of these tax credit programs. At a time when the state is cutting virtually every state program, including core essential services and local aid, it is outrageous that the public cannot find out the true value of these tax credits, which are provided in the tens of millions of dollars to corporations.
The Governor has proposed an amendment to the budget that would reinstate the full reporting requirements that go along with this important piece of government transparency and accountability. This amendment ensures that the Legislature and the general public know how refundable or transferable tax credit programs – in other words our tax dollars – are working in terms of jobs created and economic development.
The state currently has no accountability as to the cost effectiveness of these tax credits or their success in meeting intended public policy benefits. It is only fair to expect that businesses utilizing these specific tax grants for public purposes be asked to show the results of the taxpayer dollars they have received, which is exactly what the tax credit transparency provision was intended to do.
The ability to see how government uses ALL public funds is fundamental to democracy. Increasing budget transparency promotes efficiency, discourages waste and provides a check on corruption. While the Governor’s signing of the Ethics bill today is a strong effort to rebuild the public’s trust in state government, it is only the first step. We believe that these commonsense reforms are an essential part of regaining that trust.
We have asked our legislative colleagues to join us in supporting the Governor’s amendment, and we hope that members of the BMG community will as well.
Representative Carl Sciortino & Senator Jamie Eldridge