Tax breaks demand strict scrutiny
Posted May 09, 2018 in Press Releases
Statehouse committee should curtail tax break mission creep
Policy Matters Ohio testified before the Tax Expenditure Review Committee today, arguing for more rigorous review of tax breaks that sap more than $9 billion each year from the state. Wendy Patton, senior project director, told the committee, “The committee should recommend cutbacks in tax breaks to provide revenue for needed services, and standards so that those tax breaks we do have support good jobs and strong communities.”
Patton advocated for close scrutiny of three sales-tax breaks, also known as tax expenditures: those for egg farms, building materials used in certain kinds of structures, and purchases to do repairs on warrantied goods.
“Companies that don’t maintain basic standards for their workers and the environment should not be eligible for tax breaks,” Patton said, noting the labor and environmental legal violations that have been reported at certain major egg producers.
She also noted that a number of tax breaks, including the one for building materials, have been broadened over time, raising the prospect of “tax break mission creep.” This exemption, one of the 20 largest, is not offered in all states, and often is more limited than the one in Ohio, which extends to entities ranging from certain sports facilities and convention centers to structures housing captive deer.
“In light of numerous needs for public investment, from offering early education to Ohio’s children and making colleges affordable to fighting the opioid epidemic and providing support for public transit, the committee should tighten up on who is eligible for this exemption,” Patton said.