Georgia tax credit oversight bill moves through legislature
Lucrative tax exemptions and credits in Georgia could come under close watch from independent auditors under a bill that passed out of a Senate committee on Monday.
Senate Bill 302 comes after a scathing set of audits the state Department of Audits and Accounts released last month that found Georgia’s film tax credit has been poorly managed while being touted as having more economic impact on the state than it actually does.
Sponsored by Sen. John Albers, the legislation would let the governor’s budget office contract with outside auditors to scrutinize up to five tax-incentive programs each year, upon request from state lawmakers.
Auditors would dive into the economic pros and cons of the state’s many tax credits, exemptions, rebates, deferrals and other business incentives.
“All the things that each one of us would do if we were investing our money,” Albers, R-Roswell, said Monday of the audit’s scope.
The bill passed unanimously out of the Senate Finance Committee and heads to the floor for a vote of the full Senate.
Sen. Chuck Hufstetler, the committee’s chair, said tightening oversight of tax programs would help put Georgia on par with other states that do a better job tracking the performance of their incentives.
“We can do better here at making sure we’re making the best use of taxpayers’ dollars,” Hufstetler, R-Rome, said Monday.
Albers’ bill follows similar legislation he brought last year that Gov. Brian Kemp vetoed since it did not give his office authority to hire independent auditors.
Albers and Hufstetler both sat on a Senate study committee in 2017 that found shortcomings in monitoring whether a given tax incentive is spurring business and job creation as it was intended to do.
The committee’s report looked at several different tax credits, including the film tax-credit program, and found some of them were either too tough to evaluate or were potentially not spurring economic growth.
It recommended creating the kind of auditing oversight that Albers’ bill proposes, as well as for all tax-incentive measures in the state to sunset after five years.
That 2017 report seemed to predict the harsh criticism state auditors heaped on Georgia’s film tax credit program last month.
In two back-to-back reports, the state auditing agency found the credit program generates about $1 billion less in statewide economic impact than estimates from the state Department of Economic Development had claimed.
That agency and the Department of Revenue have also kept shoddy controls over the program, leading to many credits being doled out improperly to companies that should not actually qualify, according to state auditors.
The pair of reports put the film-credit program under fire in the early days of the 2020 legislative session as the General Assembly began tackling tough budget issues. But prominent lawmakers like House Speaker David Ralston have pledged to block any efforts to abolish the credit.
Senate Majority Leader Mike Dugan, R-Carrollton, reiterated in an interview last week that the film tax credit might be tweaked eventually but will not be outright discarded.
“Nobody wants to get rid of film tax credits,” Dugan said.
Read the original article in the Savannah Now, here.