December 09, 2010 02:05 AM UTC

Colorado gets a D+ for tax subsidy transparency

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• by: COFPI

(Does anyone seriously think we shouldn’t even know–just know–how much the state is giving away? – promoted by Colorado Pols)

Colorado grants tens of millions of dollars in tax subsidies annually but provides only minimal information to taxpayers about who receives the support.

That’s among the findings of a report and online research tools issued today by Good Jobs First. Researchers gave Colorado a “D-plus” grade for the state’s disclosure of tax subsidies, finding the vast majority of subsidies have no online disclosure of recipients.  

Certainly, tax subsidies can be beneficial.  They can encourage job creation or promote green energy, for example.  But we need to confirm that dollars spent through tax subsidies are achieving their goals and are not just a giveaway.  We need to hold tax subsidies accountable.  

Tax subsidy transparency is particularly relevant at a time when we are cutting hundreds of millions of dollars from K-12 education, higher education and health care services.  Not to mention the legislature faces a rather large budget gap again this year (about $1 billion).  Every dollar that is spent on a tax subsidy, is, in effect, a dollar that is being cut from K-12.  We should at least know where those dollars are going.

For example, Colorado’s Enterprise Zone Program, which designates areas where companies may qualify for up to nine different tax credits and other abatements/exemptions, cost state taxpayers $46.7 million in 2008, but it provided no disclosure of who received the subsidies. Other programs, such as the Job Creation Performance Incentive Fund, which cost $6.1 million in Fiscal Year 2009, had higher degrees of disclosure.

We can do better. There are a number of solutions the state could pursue to move that grade to passing.  In fact, in times like this, when tough choices are being made by legislators and sacrifices made by families, we must ensure every dollar spent or cut is carefully considered. We can’t do that without knowing where the dollars go and why.

More analysis of government transparency and accountability is available on the Colorado Fiscal Policy Institute’s website. The report issued today, called Show Us The Subsidies, includes looks at all 50 states and the District of Columbia. Colorado was one of seven states to receive a “D-plus” grade. Thirteen states and the District of Columbia currently have no disclosure at all and received “F” grades.