GJF's Analysis of GASB's Proposed Standard for Tax Abatement Disclosures
For Immediate Release October 31, 2014
Contact: Greg LeRoy 202-232-1616 x 211
Good Jobs First Releases Analysis of GASB’s Proposed Standard for Tax Abatement Disclosures
Washington, DC—Good Jobs First today issued its analysis of the Governmental Accounting Standards Board’s (GASB) proposed new accounting standard for economic development tax subsidies. Using the umbrella term “tax abatements,” for property, income, sales and other tax expenditures, GASB’s proposed new standard will for the first time require state and local governments to report how much revenue they lose to economic development subsidies.
Good Jobs First’s overview page about GASB and the “Exposure Draft” is at www.goodjobsfirst.org/gasb. That page also links to a detailed summary and critique of the proposed standard at http://www.goodjobsfirst.org/gasb_analysis .
“We applaud GASB for finally ending their long, conspicuous silence on this issue, which costs taxpayers an estimated $70 billion per year,” said Greg LeRoy, executive director of Good Jobs First. “We consider this absolutely tectonic news in the long history of economic development incentive reform. There are many laudable aspects of the proposed new standard. However, we also have many concerns about the draft standard, especially because it could miss many forms of economic development tax spending.”
The Good Jobs First analysis lays out five different tax-based subsidies that might elude GASB’s definition, including tax increment financing (TIF), personal income tax diversions, sales tax diversions, payments in lieu of taxes, and so-called performance-based incentives. It also questions GASB’s decision not to call for project-specific disclosure or for the reporting of future-year obligations.
“Taxpayers and public officials now have until January 30 to file comments with GASB,” said LeRoy. “We hope everyone concerned will take the time to read our analysis, look at the draft standard, and file comments.”