Wednesday, December 5, 2018
(PHOENIX, AZ) – With only three weeks remaining in 2018, it appears as though the legislative committee that is statutorily required to meet annually and review the effectiveness of state tax credits will fail to meet and do its job for the third consecutive year.
The committee has not met since December 2015. State law requires the Joint Legislative Income Tax Credit Review Committee to review each of the 54 state tax credits on a rotating schedule which results in each tax credit coming up for review every five years. The committee is charged with evaluating the credits and determining whether they are delivering on the promised benefit to the state and submit a report to the full legislature by December 15 on whether each of the tax credits reviewed should be retained, repealed or amended.
“Tax credits cost the state budget $435 million in fiscal year 2017 and have been growing fast,” said David Lujan, Director of the Arizona Center for Economic Progress. “The committee’s failure to meet means lawmakers have virtually no accountability or control over tax credits once they are in state law and taxpayers have no way of knowing if we are getting the promised return on investment.”
Even when the committee does meet, the legislature has shown little interest in repealing tax credits that are not meeting expectations. Between 2002 and 2015, the committee has recommended 16 tax credits be repealed, but only one of those credits was actually repealed according to the Joint Legislative Budget Committee.
As Arizona’s public schools, community colleges, and universities continue to be underfunded, Arizonans deserve to know whether the millions of dollars which are being diverted from our state General Fund in the form of tax credits are delivering the promised jobs and economic growth or are they just special interest tax giveaways creating a tax code which picks winners and losers.
The Arizona Center for Economic Progress
3030 N. 3rd St., Suite 650
Phoenix, AZ 85012