• 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

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

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

Analysis

House Bill 413 Creates Greater Accountability and Transparency for Tax Expenditures

Pam Thomas | February 14, 2020

HB 413, sponsored by Representative James Tipton, is a good government bill that establishes a structure for the General Assembly to know more about and better consider the purpose, cost and impact of tax expenditures. 

Kentucky loses more than $8 billion every year through tax expenditures – tax breaks, exemptions and exclusions that leave us with less money for investments in schools, infrastructure and other building blocks of our communities. Creating a process for the regular and continuous scrutiny of tax expenditures is an essential first step toward building a tax and budget system that reflects our priorities. HB 413 incorporates many of the suggestions made by the Task Force on Tax Expenditures – a bipartisan group of legislators that met regularly over the interim in 2018 to review, examine and analyze tax expenditures.

More On Budget & Tax: Tax Breaks for Facebook, Amazon and Google? Beshear Vetoes Bill Meant to Lure Data Centers

HB 413 addresses two specific weaknesses in the current system – the lack of good data to use in evaluating tax expenditures, and the lack of a coherent, regular process for doing so. With regard to the process, the bill establishes:

  • A five-year sunset for all new tax expenditures; and
  • The creation of a 17-member Tax Expenditure Oversight Board to review, analyze, provide oversight, and report to the General Assembly on tax expenditures.

To improve the data available to analyze and evaluate tax expenditures, HB 413:

  • Requires that all new tax expenditures include a purpose statement and reporting requirements;
  • Provides the oversight board with statutory authority to request and receive sufficient data from executive branch agencies to effectively evaluate tax expenditures;
  • Requires the Department of Revenue and all agencies administering or responsible for tax expenditures to assign a unique number to each individual taxpayer to allow the tracking of tax expenditures across cabinets and programs;
  • Requires the oversight board to publish an annual report; and
  • Requires the Office of State Budget Director to produce an annual tax expenditure analysis in statute (past expenditure analyses have been required biennially by budget language) and adds additional requirements for the analysis, including a data dictionary explaining the source of data used to produce each estimate, the purpose or goals of each expenditure, and a statement about whether the purpose or goal of the tax expenditure is being met.

Passage of HB 413 would be a very strong first step toward more transparency and accountability within our tax system. The structure established by the bill will enable legislators to make more informed choices about how resources are used and will also require that tax expenditures be evaluated and considered regularly by the General Assembly in an intentional and deliberate way. 

FacebookTweetLinkedInEmail

Primary Sidebar

Get KyPolicy news updates in your inbox

Sign Up

Sidebar

Perspectives

American Rescue Plan Is a Lifeline for Kentuckians

The 2021 General Assembly Can Meet the Moment with Policies that Advance Racial Equity

Letter to the Kentucky House of Representatives on Raising the Inadequate Tax Rate on HHR Slot Machines

Voucher Would Drain Much-Needed Resources from Kentucky’s Public Schools

Coalition Letter to Kentucky General Assembly: End the Tax Break on Slot Machines

Other Budget & Tax Items

KY house 1

Analysis

Corporations Were the Primary Focus of One-Time Monies in General Assembly

Analysis

Governor Should Veto Expensive, Poorly Targeted Tax Breaks for Remote Workers and Data Centers

Analysis

Legislature Spends Additional Federal and General Fund Monies on Session’s Last Day

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 © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

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

Email sent!