The Massachusetts Senate abruptly changed course yesterday on tax credit transparency, paving the way for passage of legislation that would for the first time identify the recipients of particularly lucrative financial incentives offered by the state.
By a 38-0 vote, the Senate approved a budget amendment that would compel state officials to disclose the names of companies receiving refundable or transferable tax credits and how many of the credits they received. Similar language is contained in the House budget, so the prospects for passage of some measure are good this year.
Unlike regular tax credits, which reduce how much tax a company owes, refundable or transferable tax credits can be sold and converted into cash by companies that have no tax liability.
CommonWealth magazine has reported extensively on the state’s $1 billion-a-year tax credit program and called for more transparency so the program can be properly evaluated. Patrick administration officials said they got their idea for tax credit transparency legislation from reading articles in
CommonWealth. For a complete list of the magazine’s stories on the issue,
click here.
Gov. Deval Patrick and the House have been pushing for more transparency in the awarding of tax credits for two years, but the Senate has repeatedly insisted on shielding the names of some tax credit recipients from public view.
For example, the state currently does not disclose the names of film producers who shoot movies in Massachusetts and receive tax credits equal to 25 percent of whatever they spend. By contrast, life science companies that receive similar tax credits are identified and required to meet specific job growth targets.
Sen. Karen Spilka of Framingham, the cochair of the Legislature’s Economic Development and Emerging Technologies Committee, a year ago told CommonWealth she opposed identifying tax credit recipients because it could have a “chilling effect” and dampen enthusiasm for doing business in Massachusetts.
In an interview with the magazine today, however, she said her chief concern was that earlier proposals to disclose more information about tax credits were retroactive and might affect companies that didn’t know their names would be released when they applied for the awards.
“This isn’t retroactive anymore,” she said of the budget amendment that was just approved. “If they don’t want to have their name disclosed, they won’t apply.”
Meet the Author
Editor, CommonWealth
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
She said she, Senate President Therese Murray and Senate budget chief Steven Panagiotakos were no longer as worried about businesses boycotting Massachusetts if their identities were revealed. “We need to be able to analyze the tax credit information,” she said. “It’s fair for the public to know.”
Legislative officials said it was unclear whether earlier bills were retroactive in nature. One administration official said the governor’s proposal a year ago would not have been retroactive.
The original
Senate budget amendment, filed by Sen. Benjamin Downing, a Pittsfield Democrat, would have required state officials to disclose how many jobs were created by individual companies receiving tax credits. But that provision was removed yesterday and replaced with a requirement that only aggregate job information be disclosed for all the companies receiving a specific type of tax credit.
