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Thursday, April 7, 2011

Sen. Chase’s “Clawback” bills will put tax breaks to the test

From the Senate Democrat's Blog - Maralyn's "Clawback"

Thursday, April 07 2011 - Maralyn Chase | Permalink
Most state government programs are under regular review – if they don’t work, they don't last.
The same cannot be said about tax expenditures - tax breaks given to corporations and placed on services in perpetuity. Many of these expenditures have been on the books for years. Some work, some don't, some continue to serve a purpose and others are no longer necessary.

The bottom line is that these expenditures cost the state over a billion dollars in lost revenue per biennium with little to no oversight of their net benefit to the state.

Sen. Maralyn Chase, D-Shoreline, introduced Senate Bills 5922 and 5923 which will provide oversight of tax expenditures through audits. If it is learned that the tax subsidy no longer serves its purpose or the entity hasn’t live up to its end of the bargain, the state will be able to recoup money through a so called “clawback” provision.
“We simply want to know if they have done the work we’ve asked them to do, have they served their purpose of benefitting the greater good?,” Sen. Chase asked. “Clawbacks protect taxpayers’ investments, ensuring that these companies deliver on their promises.”

More than 20 states already use clawbacks in many of their subsidy programs. Companion bills (2054, 2055) sponsored by Rep. Bob Hasegawa (D-Seattle) were recently introduced in the House.

“People are clamoring for us to do something about tax loopholes as was witnessed by recent protests in the House, the Senate gallery and by what is expected to be an enormous rally on Friday,” Sen. Chase said. “Streamlining government needs to include reigning in what amounts to over a billion dollars in giveaways. Right now that’s not the case.”

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