Bringing Transparency to Tax Breaks for Private Development
Governments have any number of programs, policies, and perks at their disposal to woo private developers to invest in their region. Nationwide, local governments give up $80.4 billion in incentives, with Texas earning the designation as the nation’s most incentive-inclined state, spending $19.1 billion annually to court businesses.
While high-profile deals to attract investment in state and local economies often involve generous tax breaks and incentives that are well documented by the media, there is no nationwide accounting for these tax-payer subsidies. But that may change with new rules proposed by the Governmental Accounting Standards Board. If local governments are forced to disclose subsidies for private development, will that change the economic development landscape? And how should the public and policymakers use this information? (more…)