WASHINGTON, Aug. 17, 2015 /PRNewswire-USNewswire/ -- Good Jobs First today lauded the Governmental Accounting Standards Board (GASB) for the issuance of its first-ever rule requiring state and local governments to report how much revenue they lose to corporate tax breaks given for economic development.
"Though we are disappointed by some of the technical shortcomings of the new standard, make no mistake: this is absolutely historic good news for taxpayers," said Good Jobs First executive director Greg LeRoy. "We have long criticized GASB for being MIA on corporate welfare; now the debate will turn to implementation of this landmark accounting rule." For more Good Jobs First material on GASB see http://www.goodjobsfirst.org/gasb.
"States and cities spend an estimated $70 billion a year for economic development, most of it through tax expenditures. But we could only estimate because GASB has never before called for standardized reporting," explained LeRoy. "That's the historic value of this new standard: taxpayers and policymakers will finally see the true price tag for economic development. This is a victory for the thousands of taxpayers, grassroots groups and public officials who have for so long demanded these tax breaks be more transparent and accountable," said LeRoy.
Among the shortcomings Good Jobs First is disappointed about: no mandatory company-specific recipient disclosure (not even of major recipients); no disclosure of how many tax-break agreements are behind the aggregate program cost figures (or how many new agreements were entered into during the reporting year); and no future-year cost reporting (even though such data is routinely embedded in development agreements and legislative authorizations).
The new standard takes effect for budgets that begin after December 15, 2015 so new data will begin to appear in 2017. GASB is a project of the non-profit Financial Accounting Foundation in Norwalk, Connecticut; its Generally Accepted Accounting Principles (GAAP) have the effective force of law in most states and credit rating agencies often insist upon them when rating public bonds.
Good Jobs First is home to Subsidy Tracker, the only national database of state, local and federal subsidy awards. Subsidy Tracker was cited by GASB during its deliberations as evidence of tax abatements' magnitude and prevalence, criteria an issue must meet to merit GASB's rule-making consideration.
SOURCE Good Jobs First