New Policy Brief: Every Dollar Counts: Why it's Time for Tax Expenditure Reform

The Great Recession has exposed a key flaw in Washington’s state budget process:  our failure to systematically account for billions of dollars spent each year on the hundreds of special tax exemptions, credits, preferential rates, and other tax preferences or “tax expenditures.”

Now more than ever, effective management of our state resources requires that lawmakers review and prioritize all forms of state spending — from direct spending on education and health care to hidden spending on tax subsidies for various businesses and individuals.

In our newest policy brief, we recommend the following key reforms that would allow policymakers to routinely balance the costs and benefits of tax expenditures against other public priorities:

• Apply sunset dates for all existing, reenacted, and newly proposed tax expenditures;

• Modify the supermajority requirement for cutting tax expenditures;

• Create a tax expenditure budget;

• Enhance Tax Expenditure Audits; and

• Expand Accountability & Eligibility Requirements for businesses that receive tax expenditures.

To read the report and our specific reforms in its entirety, click here.