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December 17, 2015
Good Jobs First
by Brian Bardwell

Full Text Published by Tax Analysts®

State Tax Notes recognizes Good Jobs First for its work promoting transparency and accountability in state tax incentives.

The group has been agitating on tax incentives for nearly two decades, and its executive director, Greg LeRoy, has been doing the same for even longer -- exposing the weaknesses of major incentive packages awarded to industrial giants that frequently failed to live up to expectations.

In 1998, a few years after writing No More Candy Store, LeRoy founded Good Jobs First, and he and his group were soon capturing headlines in Barron's and The Wall Street Journal for its reports on Vermont's economic development incentives and New York City's plans to subsidize a new home for the New York Stock Exchange.

"For far too long, corporate tax breaks in the name of economic development have been given a pass, getting far less scrutiny than appropriated expenditures," LeRoy said. "Worse, they sometimes involve intergovernmental free lunches."

Greg LeRoyMore recently, the group has been undertaking painstaking efforts to collect, aggregate, and publish details on as many individual incentives awarded as possible. The latest iteration of that project, Subsidy Tracker 3.0, boasts a database of hundreds of thousands of deals culled by Research Director Philip Mattera from hundreds of online sources and countless freedom of information requests.

This year, the group achieved a years-old policy goal that may require exponential growth in that project.

The group has been arguing at least since its first "Megadeals" report that the Governmental Accounting Standards Board should require state and local governments to account for the budget effects of tax incentives used to spur economic development.

So when the board launched a formal process to consider just such a rule late in 2014, Good Jobs First took the lead in pushing for the rules to be strengthened and approved. It rallied its supporters and like-minded organizations, coordinating a massive letter-writing campaign in support of the new standards.

Phil Mattera While a GASB project typically receives only a few dozen comments, Good Jobs First's efforts pushed the total for Statement No. 77, "Tax Abatement Disclosures," to nearly 300, far more than any other project launched in the last five years. The board unanimously approved the standards in August. (Prior coverage: State Tax Notes, Aug. 24, 2015, p. 668.)

Although the final version of those rules didn't embrace all of the group's suggestions, LeRoy said that having standardized data from most public entities -- even if only for limited categories of programs -- will give reformers a powerful new weapon when it becomes available in 2017. "That's going to be a whole new day in the debate," LeRoy said. "It's going to make the opportunity-cost debates so much more concrete and vivid than they ever have been before, especially on the public education side."

Joe Henchman of the Tax Foundation -- another outspoken opponent of poorly supervised incentive programs -- said that there will still be loud voices pushing back against reform, but the new GASB standards nonetheless have the potential to effect changes that haven't accompanied more modest efforts at oversight.

"States certainly do listen to entities like rating agencies or entities like GASB that really are an outside, disinterested observer that's just essentially letting everybody in the world know whether the books are clean or not," Henchman said. "States will really bend over backwards to make sure that they're not on the bad list with entities like that."

Honorable mentions

The Pew Charitable Trusts' mission is to inform the public, provide transparency, and publish analytical reports, research, and news articles on a wide range of issues, including state tax policies. Pew researches how states can better serve the public and seeks to identify trends among the states. Pew's "Fiscal 50: State Trends and Analysis" is a constantly updated interactive report that lends insight into states' fiscal health.

The National Conference of State Legislatures represents 7,383 lawmakers from all 50 states and has nine standing committees and seven task forces, including one on state and local taxation. The task force meets twice annually. It initially helped draft the Streamlined Sales and Use Tax Agreement and assisted states with its adoption. The task force oversees the activities of the Streamlined Sales Tax Governing Board. At its most recent meeting in August, the task force again pressed for congressional action on several state tax issues, including legislation on mobile workforce issues and the collection of sales and use taxes on remote sales.

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