Akron
Beacon Journal...
Uncontrolled spending
The governor forgot one tool for improving government: An analysis of
the state’s nearly $8 billion a year in tax breaks
Friday, May 13, 2011
Will Republicans at the Statehouse listen to the Ohio Chamber of
Commerce? Ordinarily, the answer would be a resounding yes. Yet in the
matter of tax expenditures, neither Gov. John Kasich nor the Ohio House
has followed the recommendation of the chamber, proposed in its recent
report, Redesigning Ohio: Transforming Government into a 21st Century
Institution.
The analysis cited the many state tax credits, deductions and
exemptions totaling nearly $8 billion a year in foregone tax revenue.
It pointed to the lack of any formal review process ‘’to ensure that
they are meeting their intended policy outcomes and worth the price,’’
adding, correctly: ‘’This must change.’’
Now the job falls to the Republican majority in the Ohio Senate to set
in motion the appropriate scrutiny. The chamber of commerce joins
economists and others in noting that tax expenditures operate like
spending programs, costing the treasury in the same way as road
construction or prisons. The trouble is, these tax breaks receive
little attention, some on the books since the 1930s and ‘50s without an
evaluation of how effectively they are working.
On Monday, the Center for Budget and Policy Priorities, a Washington,
D.C., think tank, advanced the cause by providing a framework for
accountability in tax expenditures. In Ohio, the governor’s office
currently issues with its budget plan a list of the tax breaks (128,
for now) with some data about their origin and cost. The Center on
Budget and Policy Priorities recommends the additional inclusion of
such information as the taxpayers who benefit from the relief, the cost
in future years and the extent to which the break is accomplishing the
desired goal.
These recommendations hardly break new ground. The Ohio Chamber of
Commerce advises the same. So have the think tanks Policy Matters Ohio
and the Center for Community Solutions. The governor and his team often
talk about ‘’tools’’ for improving the performance of government. That
is just the purpose such an evaluation would serve.
Ideally, the closing, or narrowing, of outdated or ineffective tax
breaks would generate revenue for beleaguered social services, public
schools and others whacked in the coming state budget. Even a 5 percent
reduction would yield almost $800 million for the biennium. Of course,
that appears a pipe dream, the governor now talking about more tax
cuts. At the least, the governor and lawmakers have a responsibility to
ensure the sound use of taxpayer money. That isn’t the case with tax
expenditures. The Ohio Senate must take the lead in making it so.
Read it at the Akron Beacon Journal
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