Where Did the $87 Million in Tax Breaks Go?

The state has granted $87 million in tax breaks to businesses but the public can’t find out if the breaks resulted in new jobs, business growth, and economic development, as intended, according to a report in The Providence Journal. The breaks were established through a 2008 law which requires that the Department of Revenue publish reports on which businesses are receiving the breaks, how they used them, and what the outcome was.

In the past two years, the Department of Revenue hasn’t published a single report on the 188 businesses participating in the program.

Reading into the story, however,  it becomes clear this is not a case of businesses taking the money and running. Instead, the problem seems to be government bureaucracy: one state department won’t give the other the information it needs to do its job. The Journal explains:

Aside from some practical concerns, the most compelling problem generally involves verifying that a business has paid enough in wages and benefits to some of its workers — and maintained a certain level of employment — to qualify for a certain tax break.

Among other things, the procedure would require the agency to examine the wage records of certain employees — information that is held by the state Department of Labor and Training, said Paul L. Dion, chief of the state Office of Revenue Analysis.

But the state Department of Labor and Training believes the information to be protected from disclosure by federal confidentiality laws and regulations, [said Gary S. Sasse, director of the Department of Revenue].

At the end of the story, both state officials seem to agree that the law needs to be changed to allow publication of the transparency reports.

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