With a $626 million price tag and rare bipartisanship, state Comptroller Kevin Lembo is calling on the governor and lawmakers to take advantage of an existing statute and create a committee to evaluate the credits and incentives that were part of the October jobs bill.
From job-expansion credits to reducing the minimum investment required for angel investor income tax credits, “these measures are worthy in their intent to promote economic development,” Lembo wrote Wednesday in a letter to Gov. Dannel P. Malloy and legislative leadership.
But he warned that in order to make the legislation meaningful the state “must now establish a strong, credible and verifiable mechanism to evaluate the success of these policy goals aimed at creating jobs.”
And there’s no need to reinvent the wheel. The state already has a statute on the books that calls for the creation of a committee to review these type of tax credit programs.
A 2005 statute establishes a committee which includes the chairs and ranking members of the Finance, Revenue, and Bonding Committee, a gubernatorial appointee, legislative appointments, and the commissioners of the Department of Revenue Services, Economic and Community Development, and Labor.
The committee which has never been formed was supposed to study and evaluate “all of the existing credits against the corporation business tax and to make recommendations on changes or modifications necessary where tax policy…is not providing a measurable benefit sufficient to justify any revenue loss to the state,” Lembo said.
To some extent certain tax credits, such as the film tax credit have been studied by various independent groups over the years, but the state has close to $5.4 billion of these tax credits and expenditures in its budget. Each year lawmakers promise to look at them, but for one reason or another nothing ever happens.
“Demonstrating that the desired outcomes of An Act Promoting Economic Growth and Job Creation in the State have been achieved will reinforce your policy decisions and increase public confidence in a rebounding economy,” Lembo wrote in his letter to legislative leaders and Malloy.
Sen. President Donald Williams, D-Brooklyn, said he thinks Lembo’s suggestion has merit. He said there ought to be some accountability and the he’s just as anxious to find out if the credits being provided are doing what they were intended.
His colleague on the other side of the aisle agrees.
Sen. Minority Leader John McKinney said he’s always been an advocate for reviewing all of the tax credits. He said the state should be getting rid of the ones that aren’t working.
McKinney said this is not a new issue and something the state should be looking at on an annual basis.
Then why hasn’t it happened in the past six years?
McKinney opined it’s because Connecticut has a part-time legislature and often gets wrapped up in writing legislation, instead of fulfilling its oversight role.
“There is more of an interest among legislators to work on legislation, rather than oversight and accountability,” he said.
But he argued there are certain committees like the Transportation Committee that should be doing more oversight over the Department of Transportation, which is funded largely with federal funds.