Blue Mass Group

Reality-based commentary on politics.

Myopia in Massachusetts: No Oversight Anywhere

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The article details the millions of dollars that have been spent (actually foregone) on tax breaks for businesses to create jobs, when in reality, few or none were ever created.  In many cases, jobs were actually cut.  Yet, these companies have been allowed to keep the tax savings for years, without anyone keeping tabs whether this benefit is actually benefitting the Commonwealth and its taxpayers.  

Is there any question that the state needs a framework of accountability for all of its programs and suppliers?  There needs to be an independent office, part procurement/part quality assurance office, devoted to ensuring that terms and conditions of the Commonwealth are fully and completely met and this office could pay for itself and then some.  As Amber Paw has rightfully pointed out again and again, “failing to plan is planning to fail.”

It is hard to watch the cutting of vital human services and local aid from the state budget, when the Governor’s office and the legislature allow this kind of waste to continue.  We deserve far better than this.    

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Comments

  1. Most of the tax breaks out lined in today’s story were offered by local officials and affect mostly local property tax payers, and it will be interesting to see if the Globe reports on the $20 billion (that’s with a B) or so of state tax breaks that go to everybody from young parents to senior citizens to Ratheon and Fidelity.

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    p>This Governor’s budget is relatively transparent on this mattter and publishes a list of every tax break along with the regular appropriation budget in H2.

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    p>In fact there has been a fair amount of discussion about the lack of transparency and oversight, at recent State House hearings

    A left-leaning network of organizations advocating civic engagement, One Massachusetts, in written testimony, urged lawmakers to “examine the tax expenditure budget as carefully as legislators examine the state budget every year when considering where to make increases and where to make cuts.”

    “We want a healthy, open debate in this state about how our tax system can be reformed to provide enough stable revenues to adequately fund our communities in a way that does not ask more of low income residents than it asks of the affluent,” said Yawu Miller, One Massachusetts project director.

    Miller told committee members that “pervasive” cynicism about government has led policymakers to an “imbalanced” approach to handling the ongoing budget crisis.

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  2. mentioned in the article are both state and local.  Nortel receives $2M in state and local tax breaks.  According to the Globe, it’s a state incentive program that allows companies to negotiate a tax advantage at the local level, which then automatically qualifies them for an additional state investment tax credit equal to 5% of their spending on renovations, new equipment and other items.  Additional benefits applied if a company expands  long-vacant building.  Approvals are handled at both the local level and by a 10-member state board, the Economic Assistance Coordinating Council.    

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    p>It would appear that the state administers the program:

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    A review of state records found that more than 40 percent of companies that received tax breaks pledged to create 10 full-time jobs or fewer, including nearly four dozen that promised only to add one full-time job.  Often, the companies planned to pay new workers little more than minimum wage.

     We giving tax breaks to create minimum wage jobs?  Are we all right?

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    p>And oversight?  Nada.  

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    But even when jobs are cut, the state often takes years to end a tax break, if it takes any action at all.  And officials could not name a case in which they asked a company to repay subsidies already pocketed.  “Oversight is practically non-existent,” said Neil Cohen, Massachusetts’ deput inspector general, whose office has been critical of the program in the past.  “The state must ensure that it is getting something for what amounts to an investment.”

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    p>And sometimes…the “incentives” or goody bags, as I like to call them, are provided after the fact: See Bob’s, Sepracor, and others.  

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    p>So this program gets spared…companies not providing jobs still get tax breaks…and the state cuts services and local aid.  God help us.

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