Toward this end, I would require a thorough review of every such subsidy program, because tax subsidies are state expenditures just like any other. All subsidy programs should have periodic reporting requirements, objective criteria for evaluating their success, and sunset provisions that force the legislature to re-enact based on these evaluations. Massachusetts should enforce the “clawback” provisions that were added to these subsidies, mandating that companies pay back any state assistance they receive if they fail to meet their targets for job creation.
As former Secretary of Labor and Workforce Development, I know all too well the seriousness of Massachusetts’ employment situation. The unvarnished truth is that we do need more jobs, and sooner rather than later. But the impulse to create good jobs cannot blind us to the “law of unintended consequences.” We need aggressive oversight and transparency to ensure that the people of Massachusetts reap the benefits of such efforts rather than the embarrassment of their failure.
Let’s send a clear signal that we intend to make sure every dollar spent on tax incentives is money well spent. Let’s reward and subsidize success, not failure.
Its about time tax expenditures were given the same degree of scrutiny that program budgets are. Much of our economic development spend is delivered via the tax system and yet there is little by which to evaluate it with. With unemployment remaining high, there is no excuse not to ensure these funds are effective, as you suggest.
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p>So take it to the hill. Why wait to win election. I know its ambitious and somewhat unconventional but maybe you could get a colleague to file legislation mandating the principles you espouse and giving the OSA a role in evaluating tax expenditure, alongside DOR and the legislature’s Revenue Committee.
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p>Shows your serious and the media would follow it, even though I recognise the case you need to be making while on the trail is to the people.
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p>Keep at it! This is exactly the type of issue we need an independent auditor providing oversight on.
In Jamie Eldridge’s related post on the econ dev bill you support coming before the Senate. Is there any scope to see what additional tweaks could be made to it around some of your ideas. Maybe late for that, but there is always the House consideration.
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p>Just a thought.
Excellent idea Ms Bump. It’s about time these tax credits outlined in the tax expenditure budget were analyzed and evaluated every year just like every other line item in the budget.
,,,there are also serious issues of transparency that must be addressed by the Administration. We should have web based reporting of the annual documents from firms receiving tax breaks.
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p>Another consideration should be a “living wage” provision requiring firms to pay a reasonable wage in order to qualify for the credits. This has been used in some parts of the country. Finally, the state should decouple the Investment Tax Credit and local property tax exemtion (TIF).
Thank you Ms. Bump!
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