TOPEKA, Kan. — Kansas gives up hundreds of millions of dollars in revenue to a list of tax credits each year, but finding out which companies and individuals benefit has proven difficult.
Kansas is a rare state that forbids disclosure of tax credit recipients, arguing that it’s confidential taxpayer information, the Kansas City Star reported .
The lack of disclosure provides no way of analyzing whether corporate tax credits actually work, said Greg Leroy, executive director of the corporate tax break watchdog Good Jobs First.
“When the state doesn’t disclose anything about outcomes of deals, actual jobs created, actual wages paid, you don’t have an honest cost-benefit debate,” Leroy said. “To us, that’s just irresponsible.”
Tax credits allow recipients to lower their tax liability as a reward for making certain investments or behavior, such as scholarship programs, adoptions or paying employees above-average wages. Put together, they amount to a significant item in the state budget.
The Kansas Department of Revenue reports that the state recorded $530 million in foregone revenue from tax credits in 2015. That makes up about a twelfth of Kansas’ $6.1 billion general fund budget.
Tax credit advocates said the programs encourage good public policy behavior, like higher wages or business investment.
Kansas lawmakers said they’re also in the dark when it comes to tax credits.
“Because they’re getting government help, corporate welfare, whatever you want to call it … I think the public has a right to know who’s getting that help and whether they’re creating jobs or not,” said Democratic Rep. Tom Sawyer, a member of the house Tax Committee.
Sawyer said the policy hampers lawmakers’ ability to judge whether tax credits work.
“When we’re hard-pressed for revenue, we need to make sure all of these things are working,” he said. “Because the ones that aren’t working, we need to get rid of.”
Information from: The Kansas City Star, http://www.kcstar.com