Early GASB 77 Disclosure: One Hot Mess

July 20, 2017

For the first time ever, local and state governments are just beginning to report how much revenue they lose to economic development tax breaks. We here at Good Jobs First can only describe the corporate welfare price-tag data so far as one hot mess.

Some local governments’ reports are user-friendly, even better than required, but others are tedious. As we’ve predicted, tax increment financing data is especially problematic. When reporting passive revenue losses, some are clear and others are apparently in error. And a few places missed the new disclosure memo altogether.

June 30 th was the reporting deadline for more than 1,000 governmental entities to issue their Comprehensive Annual Financial Reports (CAFRs) for their fiscal years ending last December 31 st . For the first time ever, those reports are subject to GASB’s new Statement 77*. (Far more government just closed their books June 30; they will issue CAFRs late this year, when we expect to be inundated by thousands of CAFRs a week.)

Good Jobs First is extracting subsidy-cost data from each CAFR and will unveil our new Subsidy Tracker 2 database later this summer.

To date, we have documented more than $4 billion in subsidies from 55 CAFRS in 20 states.

Four Largest GASB 77 Subsidy Disclosures to Date


New York City $3,038,800,000
Chicago $596,599,000
Indianapolis $93,368,000
Columbus, OH $33,064,028



Data Quality Very Irregular

We expected the first year of disclosures to lack standardization, but we’ve been surprised by the wide variation. While some cities have combined all relevant information in one note entitled “Tax Abatements,” others have scattered information throughout the CAFR.

Laudably, many are providing useful disclosures beyond GASB 77’s minimal requirements, while a few are even including subsidies not usually considered economic development, like homestead exemptions and senior citizen property tax credits.

TIF Disclosure is Particularly Problematic

In its April 2017 Implementation Guide, GASB provided complicated advice on tax increment financing (TIF). GASB ruled Statement 77 does cover so-called “pay-as-you-go” TIFs in which companies pay taxes to the government and then get those taxes back as reimbursement as various aspects of a TIF project are completed. GASB also said “tax rebate TIFs,” in which companies simply get their taxes back, are also to be reported under Statement 77.

However, GASB has always held that TIF revenues applied to debt service (on TIF bonds) are excluded from GASB 77’s disclosure requirements. According to GASB, information on these costs can be found in other sections of the CAFR, most notably the sections focusing on debt.

Our experience to date suggests that debt-service TIF expenditures are not always evident. Some jurisdictions, such as Chicago, do clearly report on tax revenues applied to TIF bonds. But other localities, such as Wichita, it is less clear whether TIF amounts disclosed represent total diversions or simply TIF funds applied to debt service.

Finally, Good Jobs First points out that even if TIF paid for debt service is clearly reported, it may miss a great deal of diverted tax revenue. That’s because TIF bond investors typically insist that the tax increment exceed the amount of debt service, to protect investors in the event of an event that reduces the increment (a project could falter, a property owner could demand a lower assessment, etc.).

Passive Losses are a Mixed Bag

GASB 77 also requires governments to report tax revenue they lose passively, as a result of abatements granted by other bodies of government. Many counties, including Ramsey County, Minn., Cuyahoga County, Ohio, and Erie County, N.Y., among others, have done a fine job, listing each city within the county that has entered abatement agreements, and the resulting passive loss of county revenue. But to our surprise, the Pittsburgh Public Schools, the first large school district to report GASB 77 data, reported no passive losses stemming from abatements granted by the city.

Particularly troubling are reports from King County and Snohomish County (Washington State’s largest and third-largest counties, respectively). Each stated that they lost sales tax revenue due to state sales tax abatements granted aerospace manufacturers (read Boeing) and data center operators (read Microsoft and Amazon), but the counties could not report the amount of their losses because the State has not calculated it. In a state with no personal income tax and a very controversial history around subsidies, especially those enacted for Boeing, this missing data is big news.

A Few Places Seem to Have Missed the GASB 77 Memo

Two counties in Wisconsin, York and Dane (which includes the state capital of Madison), make no mention of the new GASB 77 requirements in their CAFRs, and do not disclose any abatement spending. This despite the fact that each has an economic development website touting a range of incentive programs available to businesses.

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*For those still unfamiliar with the Governmental Accounting Standards Board (GASB) and its Statement No. 77 on Tax Abatement Disclosures, here is Good Jobs First’s explanation: https://goodjobsfirst.org/GASB77Analysis

CORRECTION: An e-blast version of this post sent to Good Jobs First’s mailing list, incorrectly listed Minot, ND as having $145 million in tax abatements in 2016. The correct number is $145,182, and is posted in Good Jobs First’s Subsidy Tracker 2 database. As a result of this error, Minot is no longer included in the table above.