House Gives Thumbs Up To Tax Credit Transparency
HARTFORD, CT - Legislation that would toughen oversight of state tax credits and economic incentives unanimously passed the House of Representatives Wednesday.
The bill, championed by state Comptroller Kevin Lembo, now moves to the Senate.
A similar bill unanimously passed both chambers last year before it was vetoed by Gov. Dannel P. Malloy. The House overruled Malloy’s veto, but the Senate failed to reconsider it.
The bill’s goal, as written, expands legislative review of economic development programs.
It seeks to use DECD’s annual report to the legislature and the auditors’ regular and stand-alone audits to trigger legislative reviews of spending on large tax credit programs.
Proponents of the legislation say it will give the legislature greater oversight of financial assistance and tax incentives the executive branch awards Connecticut businesses.
“The bill will expand legislative oversight over this important program,” Jason Rojas, D-East Hartford, chair of the Finance, Revenue and Bonding Committee, said.
Lembo, who is also exploring a run for governor in 2018, had spent the days leading up to the House vote campaigning for its passage. He praised the House for its vote.
“Connecticut can only realize its great economic potential if it adopts best practices - beginning with how it analyzes the success and failures of our economic development programs,” Lembo said.
He said it’s frustrating that Connecticut invests half a billion dollars each year in economic development through forgivable loans, tax loopholes, and other programs.
“But guess what, we don’t really know if these investments are working because we don’t do an independent analysis. We’re one of the only states that doesn’t do it,” Lembo said.
Malloy’s spokesperson, Meg Green, said. “The First Five initiative continues to be an important tool in growing our economy - creating over 3,500 job in Connecticut to date.”
The program gives large businesses who promise to create more than 200 jobs forgivable loans and other economic incentives to grow their workforce in Connecticut. The program has been criticized because the data provided by the Department of Economic and Community Development doesn’t always provide easy answers about how the state is spending taxpayer dollars on these large corporations and whether they are creating the promised jobs.
“The stewardship of taxpayer dollars is a responsibility we take very seriously and we are supportive of the proposal’s efforts to promote the appropriate transparency and accountability of the state’s economic development investments, tools, and programs,” Green said.