Boston Globe: Disclose who benefits from special tax breaks

Boston Globe Editorial
November 17, 2009

WHEN MASSACHUSETTS gives out special tax breaks to foster economic development, the public deserves to know who benefits from the programs and how many good jobs they create. Do million-dollar incentives for life-sciences firms support the growth of high-skill manufacturing or merely a smattering of menial jobs? Does the state film production credit subsidize a few mansions in the Hollywood Hills, or does it foster an ecosystem of local set designers, camera crews, and actors?

To cast some light, a group of lawmakers wants to revive a proposed requirement under which state officials who administer so-called refundable tax breaks would have to identify the recipients, the number of jobs created, and the average salaries of those jobs. The rule is wise and well worth adopting.

Yet when Governor Patrick first proposed the measure earlier this year, the Legislature watered it down badly, refusing to authorize the release of data on individual recipients.

Beyond film production and the life sciences, the refundable credits also promote historic preservation, the medical device industry, brownfields development, dairy interests, and low-income housing. They function like grants, because they are available even to firms with little tax liability in Massachusetts. Some can be bought and sold on an open market. Yet if the state were making direct appropriations to companies, those grants would show up in budget documents. The tax credits don’t, out of a misplaced deference to the privacy of the recipients.

Ten other states have rules requiring disclosure, says state Senator Jamie Eldridge, a supporter of the change. Massachusetts ought to join them.

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