For decades, the public had no meaningful way of knowing how much schools lost via government subsidies given to corporations as part of “economic development”. We could reasonably assume it was substantial: property taxes are the biggest source of public school funding, so giving corporations a pass on paying some or all of it inevitably hits schools the hardest.
Public school districts in South Carolina lost $423 million in property tax revenues during the 2019 fiscal year, due to tax abatements county governments granted to corporations. That’s an increase of $99 million – or 31 percent – compared to just two years earlier, according to a new Good Jobs First report released today: “The Revenue Impact of Corporate Tax Incentives on South Carolina Public Schools.”
Tax abatement disclosures often need to be enforced at the state level. We have isolated a few states that have abnormally low disclosure rates among their local governments. Is there underreporting going on? Is underreporting a statewide problem?
For local governments, acknowledging GASB Statement No. 77 on Tax Abatement Disclosures is not a bad start, but not disclosing the amount of taxes abated is bad for transparency. This blog exposes the common "excuses".
When a local government does not report on tax abatements, is it not complying with the GASB 77 disclosure rule, or is there nothing to disclose? This blog answers the question.