By Greg LeRoy in Bloomberg/BNA Daily Tax Report
As of early June, more than a dozen local governments have issued Comprehensive Annual Financial Reports (CAFRs) reporting for the first time how much revenue they lost to economic development tax break programs. Some of these early disclosures are overly narrow, others are needlessly difficult to decipher—and a few go far beyond the basic requirements, providingtaxpayers and investors outstanding new information.
The new reporting is pursuant to GASB Statement No. 77 on Tax Abatement Disclosures (see Weekly State Tax Report, January 27, 2017: ‘‘2017: A Landmark Year for Transparency on State and Local ‘Corporate Welfare’ ’’). This is the first time GASB has ever set forth a Statement on any kind of tax expenditure. The 2014 Exposure Draft for what became Statement 77 in 2015 drew almost 300 comments, making it one of GASB’s most heavily-debated proposals ever.
Tale of Two Cities: Columbus and Birmingham
Emblematic of the two extremes seen so far under Statement 77 are two big cities, each confounding our expectations.