Tax Expenditure Analysis

In addition to the ongoing fiscal analysis and research of The Commonwealth Institute for Fiscal Analysis, the Institute will produce a first-of-its-kind report of the cost of recent tax expenditures — tax credits and other “incentive” programs enjoyed by corporations and individuals — which currently cost at least $2.5 billion to the state in foregone revenue. While we are not opposed to tax incentives per se, the fact that these programs, once adopted, are not subject to review means we have no way to know whether the amount of public investment we make in these programs is offset by any balancing public benefit. Accountability for this allocation of public investment is a simple matter of responsible fiscal management. With the release of this report we will advocate for reforms to require the same level of scrutiny that applies to budget appropriations to be applied to these tax expenditures so the public can determine whether the investment is worth it.