Rhode Island's Remarkable Tax Credit Disclosure Report
Last week, Rhode Island's Department of Revenue Division of Taxation released a study detailing the tax credits and incentives that nearly 120 companies operating in Rhode Island received over the past year. The report is a result of recent disclosure legislation intended to reveal to the public and policymakers just how much money Rhode Island corporations receive. The Poverty Institute has their own summary of the report here. The release of the report is quite timely as lawmakers are coming to terms with a projected shortfall and may dip into the state's rainy day fund.
The disclosure legislation required the state "to annually report the names, address and amount of tax credits received during the previous fiscal year." Some states have disclosure reports, but including the names of recipients of government largesse is a very unusual -- and positive -- step. Now Rhode Islanders know which businesses received part of the $54.1 million in tax subsidies doled out during the last fiscal year. CVS (the pharmacy chain) saved about $17.2 million through various credits and watchers of Wall Street may be interested to know that Bank of America benefited to the tune of $1.72 million from Rhode Island's attempts to spur development.
The state's tax administrator said, "This report is not intended to provide an analysis as to the effectiveness of the tax credit programs. It is simply aimed at disclosing the amount of tax credits received by taxpayers." But it's almost a certainty that this type of disclosure will affect the politics surrounding these tax credits, since voters actually know who and what they're subsidizing. We'll remain on the edge of our seats until next month when the Department releases a report detailing the, "the full-time and part-time jobs created or retained by each recipient, and the employee benefits provided; the degree to which each recipient has met tax-credit requirements and goals for job creation or retention and employee benefits; and the full cost to the state of each tax-credit awarded." Thanks to this report, policymakers, taxpayers and advocates can now have honest discussions about tax incentives with an understanding about who actually benefits.