• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Kentucky Center for Economic Policy

Kentucky Center for Economic Policy

   

  • About Us
  • Press Room
  • Donate
  • Summer Policy Institute 2023

Research That Works for Kentucky

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Types
    • News
    • Op-Ed
    • Research

   

  • About Us
  • Press Room
  • Donate
  • Summer Policy Institute 2023

Copyright © 2023 KyPolicy Privacy Policy Terms & Conditions Sitemap

Analysis

Bill Would Be a Step Toward Greater Accountability for Tax Breaks

Anna Baumann | February 20, 2013

Legislation introduced in the House proposes new reporting requirements for some economic development incentive programs, and is a step in the right direction toward greater scrutiny of these costly financial subsidies.

Kentucky needs better data on the cost-effectiveness of the business tax breaks it awards. A few years ago, the state created an online database that provides information on tax breaks when they are awarded, but provides no follow-up information about the resulting impact. House Bill 242 would require the Cabinet for Economic Development to post online information about the number of jobs actually created, wages paid and tax breaks received by companies participating in some of its programs, and to produce an annual report.

More On Budget & Tax: Shorting State Workers’ Pay Hurts Us All

In 2013, the business tax breaks and financial assistance programs included in HB 242 will cost the state almost $200 million, according to the state’s tax expenditure report. As a tool for economic growth, tax breaks can be less effective and more costly than other proven strategies such as funding for early childhood education, small business assistance and job training.

Over the past 30 years, Kentucky has relied heavily on corporate tax breaks to attract business and create jobs while falling behind on other important factors like quality of living, a healthy and educated workforce and infrastructure.

HB 242 would help inform the debate. But even if it were to become law, there’s no guarantee the state would use the data generated to make tough decisions about whether to curb these programs. Unlike funding for education and health which are vulnerable to cuts each budget session, tax breaks are permanent fixtures in the tax code. Legislation should impose expiration dates on tax incentive programs in order to bring them up for regular review and allow legislators to weigh whether there are more valuable uses of state dollars. Otherwise, ineffective subsidies will continue to fly under the radar from year to year.

FacebookTweetLinkedInEmail

Primary Sidebar

Get KyPolicy news updates in your inbox

Sign Up

Sidebar

Perspectives

Shorting State Workers’ Pay Hurts Us All

Cutting Bourbon Industry Taxes Harms the Communities That Sustain It

Lawmakers Should Help Our Kids, Not Lock More Up in Failing Juvenile System

Income Tax Reduction Is Another Blow to Rural Kentucky

Kentucky Should Not Volunteer for Greater Inequality by Becoming More Like Tennessee

Other Budget & Tax Items

Untitled design 3

Analysis

HB 444 Leaves $110 Million On the Table for State Worker Pay

Untitled design 4

Analysis

‘Transplant’ Bill Would Give Large Windfall to Companies Recruiting Remote Workers

FYyX9deXkAIV AM

Analysis

Eastern Kentucky Needs Legislature’s Help to Address Post-Flood Housing Crisis

Ky. Policy

Footer

Research that works for Kentucky

433 Chestnut Street, Berea, KY 40403

Phone: 859-756-4605

General information and inquiries: info@kypolicy.org

   

Help us make the facts free and accessible to everyone. That’s how Kentucky will thrive.

Donate

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Work
    • News
    • Op-Ed
    • Research
  • About Us
  • Press Room
  • Contact

Get KyPolicy news updates in your inbox

Sign Up

Copyright © 2023 KyPolicy Privacy Policy Terms & Conditions Sitemap

made by P&P
Share this ArticleLike this article? Email it to a friend!

Email sent!