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Testimony on Stregthening Accountability for Tax Breaks in Washington state

Posted by michaelm at Apr 18, 2013 08:35 PM |
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Senior Fiscal Analyst Andy Nicholas is testifying today before the House Finance Committee on Senate Bill 5843 -- a bill which would put accountability measures in place for future tax breaks.

Here are his prepared remarks:

"Good morning Mr. Chair and members of the Committee. For the record, my name is Andrew Nicholas. I am the Senior Fiscal Analyst with the Washington State Budget & Policy Center, a nonprofit research organization that promotes sound fiscal policies in order to build a prosperous future for all Washingtonians.

Thank you for giving me the opportunity to testify in support of Senate Bill 5843, which represents an important step toward fostering a more transparent and accountable budget process in Washington state.

As many of you know, the number of special tax breaks on the books in our state has nearly doubled in just the last two decades. Yet, not nearly enough has been done to ensure all of these tax breaks are performing as advertised. And, the current budget process does not allow policymakers to adequately balance the costs and benefits of these tax breaks in the context of all public priorities, such as educating our children and ensuring we live in safe, healthy communities.

If approved, the Chair’s proposed amendment to SB 5843 would be a bold step toward tackling the endemic lack of transparency in our tax break system. Requiring all newly created tax breaks to include:

  1. A clear public purpose and robust performance metrics to evaluate that purpose would give policymakers and state auditors the tools they need conduct thorough and timely evaluations;
  2. Public disclosure requirements for beneficiaries would allow policymakers and the public to ensure recipients are creating jobs and investing in Washington state rather than pocketing tax dollars or using them to subsidize jobs in other states; and
  3. Regular re-authorization dates would help policymakers eliminate underperforming tax breaks and reinvest those resources in more proven investments that create jobs and help middle-class families prosper.

All of these elements are needed to create a more balanced and transparent system of financing our shared investments in health care, education, and public safety. The only change we suggest is that the accountability measures included in this bill be applied to all existing tax breaks in addition to newly proposed ones.

Again, I would like to thank Chairman Carlyle and members of this committee for your leadership on this important issue and for your service to our state."

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