Washington, DC--For state and local budgets starting December 16, 2015 or later, most governments will have to disclose how much revenue they lose to corporate tax breaks given in the name of economic development.
By Margie Manning, August 17, 2015
The Governmental Accounting Standards Board has issued its first-ever rule requiring state and local governments to disclose information about tax abatement agreements.
By Hilary Russ, August 14, 2015
For the first time, state and local U.S. governments will be required to report how much money they lose on corporate tax breaks for economic development projects, according to a new accounting rule issued on Friday.
For decades, state and local governments have issued Comprehensive Annual Financial Reports (CAFRs) that failed to include an important part of their fiscal condition: the extent to which they have forgone revenue by giving economic development tax breaks to businesses. An estimated $70 billion in subsidies are awarded each year in the name of job creation and economic growth.
In the week and a half since Jerry Hirsch of the Los Angeles Times’ broke a story on billionaire entrepreneur Elon Musk’s use of subsidies as key to his business’ plans, the story has gone viral.
Two-thousand fourteen was a banner year for our movement, hands down. The first move to require standardized subsidy-cost reporting! The first half of a legally-binding two-state cease fire deal! The first state ban on tax-break commissions! A big surge found in state disclosure of subsidies! Big improvements to our Subsidy Tracker, enabling first-ever mash-ups!
For many years, we at Good Jobs First have criticized GASB—the Governmental Accounting Standards Board, or “GAZ-bee”— for failing to require state and local governments to disclose economic development subsidy spending in a uniform way.
It appears that’s finally about to change, and if it does, it will be hard to overstate the significance of the news.