Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Che Odom
A recommendation that states and local governments shouldn’t be required to disclose certain property tax reductions to businesses is drawing scrutiny from watchdog groups and pension funds.
A rule from the Government Accounting Standards Board (GASB) required cities to begin publicly reporting their total tax abatement outlays for the first time in 2017.
However, new proposed guidance from GASB would exempt from public disclosure tax abatements on property owned by local and state governments. It’s an approach supported by governmental officials from Montana, Iowa, California, and other states.
Those opposed to the proposal say they find the disclosures helpful and are concerned GASB may be undermining their effort to make government budgeting more public.
If GASB officially adopts the guidance, the proposal would provide a loophole for businesses and governments to hide from the public certain tax reductions granted to companies, Helen Burns Sharp, founder of the Tennessee-based Accountability for Taxpayer Money, said in a Feb. 15 comment letter to GASB.
“I can understand your not wanting to require local governments to report property tax breaks in instances where cities or counties truly own the property,” she said. “However, in Tennessee and several other states, industrial development boards or other bond boards take title to properties to enable companies to get tax breaks.”
GASB sought comment from the public on proposed guidance for local governments regarding the disclosure of abatements, as well as other accounting requirements.
The proposed guidance attracted 51 comment letters from state officials, pension funds, tax professionals, and organizations such as Accountability for Taxpayer Money, Good Jobs First, New Jersey Policy Perspective, and the National League of Cities.
The International Association of Fire Fighters, which represents more than 310,000 fire fighters and paramedics, said in a Feb. 15 letter that some of the guidance being proposed by GASB would make disclosure of tax abatements “far more opaque and far less useful,” because it would exempt projects that “use titling of corporate projects in the name of government agencies” to provide tax reductions that otherwise would be barred by law.
While many government officials support the new guidance, Mayor Timothy Keller of Albuquerque, N.M., said in a Feb. 12 letter that he opposed the amendments. He said he recognizes the “value and utility” of such disclosure requirements as a “management tool,” and he touted New Mexico’s efforts to be a leader in the disclosure of tax incentives used for business development.
To contact the reporter on this story: Che Odom in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan C. Tuck at email@example.com
Copyright © 2018 Tax Management Inc. All Rights Reserved.
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)