Show Me the Money: Proposed New Board Would Scrutinize Tax Breaks

“Corporate welfare” is a phrase using political dirty words from both the left and the right, respectively. When put together, the term “corporate welfare” seems to disgust everyone across the political spectrum. Yet, tax incentives and expenditures for wealthy corporations and big businesses remain high.

A new bill in the KY House seeks to ensure taxpayers are getting their money’s worth.

House Bill 58, sponsored by Rep. Ken Fleming, R-Louisville, would establish the Tax Expenditure and Economic Development Incentive Review Board. The board would evaluate past incentives, calculate their estimated annual revenue loss or gain, and offer recommendations for potential adjustments.

Key points of HB 58:

• The board will review, analyze, and provide recommendations on all tax expenditures and economic development incentives offered by the state.

• The board will be composed of 12 members, appointed by the leadership of the Kentucky General Assembly.

• The board will have the authority to:

  • Require agencies to provide information necessary for its evaluations.

  • Conduct public hearings and solicit testimony.

  • Establish a uniform format for reports and information submitted to the board.

  • Hire experts and consultants to assist with evaluations.

  • Contract with private organizations for research and analysis.

• The board will be required to:

  • Conduct a systematic review of all tax expenditures and economic development incentives, prioritizing based on impact and political sensitivity.

  • Create a yearly schedule for reviewing specific incentives.

  • Develop recommendations for ending, amending, or continuing existing incentives.

  • Identify and list all existing incentives, along with their purpose, goals, beneficiaries, and usage.

  • Research issues related to existing or proposed incentives.

  • Develop standardized reporting requirements for agencies.

  • Evaluate proposed changes to laws that include incentives, at the request of certain legislative leaders.

  • Review new or amended administrative regulations that include incentives.

  • Publish an annual report with its findings and recommendations.

• The bill also includes provisions for:

  • Limiting the duration of new incentives to five years.

  • Requiring new incentives to have stated purposes, goals, and performance measurements.

  • Requiring data collection and reporting for evaluating incentives.

  • Allowing the board to review proposed incentives before they are assigned to committees.

  • Assigning unique numbers to taxpayers for tracking incentive usage.

  • Requiring the Department of Revenue and other agencies to collaborate with the board.

  • Expanding the responsibilities of the Governor's Office for Economic Analysis to include providing detailed estimates of revenue losses from tax expenditures and economic development incentives.

Overall, this bill aims to increase transparency and accountability in Kentucky's use of tax expenditures and economic development incentives. It’s the corporate welfare watchdog we’ve been waiting for.