Business tax subsidies are eroding Connecticut’s state revenues and contributing to the state deficit. Connecticut has spent hundreds of millions of dollars in recent years awarding tax credits to a small fraction of state businesses, most of them large. The total amount of state revenue spent through business credits has also been on the rise, increasing 20-fold between 1987 and 2007.
Disclosure of business tax subsidies is essential as a first step toward evaluation, accountability, and priority setting. Unlike economic development assistance awarded through the Department of Economic and Community Development, which creates a paper trail regarding the economic benefits awarded to a business, which businesses are benefiting, the expected benefits to the state from the award and the like, there is no comparable oversight for tax expenditures. Many of these questions cannot even start to be answered if we don’t know which businesses benefit-and by how much-from the credits, deductions, and exemptions that Connecticut awards them. House Bill 6560 would require this minimum standard of transparency.