Rep. David Dank
The Legislature has a golden opportunity this year to reform our state’s convoluted and wasteful tax credit system and pass along the savings to individual taxpayers. Unfortunately, some lawmakers seem to be wavering under pressure from an army of special interest lobbyists who persist in defending the indefensible.
The choices this year are simple: We must reform a widely abused tax credit system that dispenses special favors to the few, and then we can pass real income tax cuts for all. We cannot do the latter alone without gutting the state budget. Unfortunately, the first month of the legislative session has been less than encouraging.
The task force I chaired last year reached some undeniable conclusions. It found that many tax credits that had been granted in the past failed to create promised jobs. The task force also criticized the practice of issuing transferable tax credits, which allow businesses in one industry to sell tax credits to an unrelated company that then cashes them in like poker chips.
Several bills have been filed to correct these abuses and to impose strict transparency and accountability on tax credits, which cost the state budget several hundred million dollars annually. It’s important to recall that the attorney general has already issued an opinion calling many of these tax credits “constitutionally infirmed.”
No responsible legislator opposes worthy incentives that create real, lasting jobs, or that help sustain basic industries. But some of us question a system that’s become a gigantic roulette wheel, with various special interests jockeying to reap unearned rewards worth millions.
One tax credit being vigorously defended by lobbyists benefits construction projects on historic buildings, which also qualify for a long list of additional tax breaks and other incentives. A crafty developer can manipulate those special state and federal breaks to get the taxpayers to fund almost 100 percent of the project.
