Lembo: Public Should Have More Access To Business Tax-Break Info

After recent controversy over secrecy in state economic-assistance deals with corporations, state Comptroller Kevin Lembo is calling for creation of a searchable database for business tax credits – so that citizens can learn on their home computers about tax breaks given to companies.

The proposal was first on a list of 13 recommendations prepared by Lembo “to improve transparency, oversight and evaluation processes.” Lembo wants to establish the same sort of database that now provides the public with access to state budget appropriations.

“Tax credits reduce revenue in order to achieve a specific public policy purpose. The public has direct access to information regarding all state appropriations, including grants made to specific entities. The same should be true of tax credits,” Lembo wrote in a letter this week to commissioners Catherine Smith of the Department of Economic and Community Development and Kevin Sullivan of the Department of Revenue Services.

State corporate tax credits amount to more than $140 million a year, legislative fiscal analysts have said.

Lembo’s recommendations were submitted for consideration to the Governor’s Business Tax Policy Task Force, which is chaired by Smith and Sullivan.

State economic-development deals with businesses remain a sore spot with freedom-of-information advocates. The latest flare-up on the issue came in a mid-June special legislative session. Majority Democrats drafted – but quickly backed off on – a proposal to block public access to information about tax breaks and other state benefits given to private businesses. The proposal was ditched after protests, including one from House GOP leader Lawrence Cafero, who called it “embarrassing.”

Lembo, a Democrat, also said in Monday’s letter that state officials should improve public information and accountability concerning each firm receiving assistance from the Department of Economic and Community Development.

“DECD currently provides information regarding business assistance recipients, the type and amount of assistance received, the jobs created or retained, and the additional state domestic product produced as a result of the funded project,” he wrote.

He said the department’s reporting could be “further enhanced” with additional information on why a project was selected for a tax credit and whether the recipient was “meeting the terms of the agreement.”

Lembo also said businesses should be required to file a single corporate income tax return, to eliminate their ability to lower their tax liability “by shifting income amongst related entities.”