PRESS RELEASE: The Georgia Budget and Policy Institute (GBPI) Calls for Improved Transparency in State Tax Credit System
SAVANNAH, GEORGIA — Today, Staci Fox, President & CEO of the Georgia Budget and Policy Institute (GBPI), delivered testimony to the state’s Joint Tax Credit Review Panel on the need for a more transparent and equitable tax credit system. Currently, Georgia ranks worst among the 50 states in disclosing information about tax credit programs and other economic development incentives.
“The state has taken a vital step toward creating a fairer tax system by convening this panel and by implementing specific legislative provisions like the one in 2021’s SB 6 that provided for the analyses of tax benefits. While these measures are commendable, past evaluations of tax credits have run into resource and information limitations that hindered meaningful findings and the identification of actionable next steps. Overall, the current tax credit system is vulnerable and allows large out-of-state companies to exploit Georgia’s tax credits while sidelining small businesses,” said Staci Fox, GBPI President and CEO. “The need for consistent, robust evaluations cannot be understated. Georgians deserve transparency in how their tax dollars are being spent. By implementing a comprehensive and regular evaluation process, the state can lay the foundation for transparency, accountability and equitable and responsible resource allocation.”
GBPI recommends the following actions to enhance transparency and equity in Georgia’s tax credit system:
- Regular Review Process: Enact a systematic, cyclical review process to comprehensively evaluate the effects of all state tax credits and incentives.
- Annual Disclosures: Mandate annual disclosures that include recipient information, award values and data on jobs created, including wage details for all state tax credit and incentive programs.
- Sunset Provisions: Introduce sunset provisions on all tax incentive programs.
- Safeguard and Monitor: Implement measures to safeguard against misuse of tax subsidies and incentives.
- Residency Requirement: Enforce in-state residency requirements for tax credits based on employee count and hiring.
- Detailed Public Reporting: Require comprehensive public reporting on the total number of credits transferred/sold, with annual updates on the number of credits issued and the total amount outstanding.