Remember last year when the Legislature decided that it was time to take a closer look at all the exemptions, deductions and credits in the tax code, which are known collectively as tax expenditures? An excellent idea, particularly since this year the state forgoes more money ($26 billion) through those exemptions, deductions and credits than it takes in ($22 billion). The loopholes, in other words, are now bigger than the loops.
The folks who were deputized to take that closer look reported in on April 30, recommending that the state measure the success of tax breaks before renewing them. The message overall:
In the interest of simplicity and equity, the Legislature and the Governor should work together to reduce the number of existing tax expenditures and the total amount of forgone revenue from the Tax Expenditure Budget…
Well, that didn’t last long. On Monday, House Speaker Bob DeLeo announced that it is high time we “enhanced” the “competitiveness” of the state’s businesses. That usually means making those tax exemptions, deductions and credits that benefit business bigger. In the case of the bill he was introducing, it means new ones, too:
A brand new Community Investment Tax Credit, the three-year cost of which will be up to $12 million.
And the Economic Development Incentive Program tax credit will be, as the House press release puts it, “streamlined…to maximize the program’s incentives.” This program is capped at $25 million per year; the new incentives will likely push the current expenditures of $21.7 million closer to that cap.
Lastly, the tax credit for improving environmentally-damaged properties is to be extended two more years. The cost of that one: $24.6 million per year.
These proposals add up to about $65 million. Maybe they are all wonderful policy ideas. But in announcing them, the Speaker did not even mention the state’s recent resolve to be more careful about tax expenditures, much less vouch that his proposals met that new standard of carefulness. Which brings to mind a prayer attributed to St. Augustine, “Lord, make me chaste, but not yet.”