I’ve been really good this year. I paid my taxes, didn’t spend beyond my means, and voted in the primary election. In honor of my spot on your Nice List, I have a few ideas for gifts under my tree.
Amy Rose here. I’m the GASB 77 Project Coordinator at Good Jobs First, and I spend a lot of time looking inside state and local government finances – specifically, the fine print in end-of-year spending reports by governments; they’re called Annual Comprehensive Financial Reports. Do you use those in the North Pole? I’m thinking not, since you must have a fantastic credit rating! But here in the U.S., they’re a great way to see how communities spend public money.
I especially focus on how much money they give away in tax breaks to corporations every year. It’s usually required now, per an accounting rule called GASB 77. It requires governments to report the tax revenue they lose as a result of certain tax break programs; it’s found in a financial note in ACFRs.
After reviewing hundreds of ACFRs, I have some ideas for “gifts” I’d like to receive from jurisdictions around the country. Here are my top five:
- For Hinds County, Alabama to not make me wait three years for the release of its 2021 Annual Comprehensive Financial Report (ACFR). Yes, they told me they hope to have their 2020 ACFR out in 2023 sometime but… surely that was a one-time thing? After all, most other places publish that information within a year.
- To the City of Birmingham Downtown Redevelopment Authority and the Industrial Development Board of the City of Birmingham: please start cooperating with the City of Birmingham to compile all the details of the tax breaks you give. The city has tried and tried to obtain this information from you, with no success. Take off your Grinch hat and get in the holiday spirit! Without that information, residents have no idea how much of their money they’re giving to corporations and for what.
- Jefferson County, Alabama please accurately report your tax revenue losses! Your 2021 ACFR incorrectly reported the property value assessed, not the amount of property tax abated… that’s a difference of $200 million for those of us counting at home.
- To Rochester, New York, please go back to your old ways of GASB 77 reporting. You know, like how you used to include payments-in-lieu-of-taxes (PILOT) agreements for companies that get tax breaks? You were so good about doing this from 2017 through 2019 then stopped in 2020 after being advised you were disclosing too much. Little secret: there’s no such thing as too much disclosure when it comes to how a community’s money is being used.
- To the entire state of California (minus about four towns), please start reporting how much revenue your communities are foregoing to corporate tax abatements. All of your counties and school districts are supposed to be reporting tax abatements, but hardly any do. We hear that may be due to an incorrect interpretation of the rule? But there’s no time like the present to get it right.
Santa, some governments are doing a great job disclosing the cost of tax break deals (and even naming recipients), but others leave much to be desired. I’ve singled out a few, but there are many other places that could take simple steps to better reveal what they’re doing with our tax dollars.
Santa, on behalf of all of us on the Nice List, could you put in a word?