Groups Call on Legislature to Increase Transparency on Tax Credits

Arizona PIRG

Last week the Joint Legislative Tax Review Committee had a meeting to review seven income tax credits, where six of the tax credits were reviewed in Executive Session.  During the Executive Session portion of the meeting, members of the public and press who were in the hearing were instructed to leave the room while the committee received reports from legislative staff and the Department of Revenue. Children’s Action Alliance and the Arizona Public Interest Research Group (Arizona PIRG) argued that the recent statutory changes meant to provide the Tax Review Committee with additional information have worked to exclude the public from any information about credits taken by only a few taxpayers. 

“We think that the legislature should repeal laws that hide crucial information about tax credits,” said Dana Wolfe Naimark of Children’s Action Alliance.  “Last week’s tax credit hearing left the public with no information about the discussion that took place.  The public has a right to know whether these tax credits are a good deal for Arizona.”

The groups specifically recommended the repeal of laws that prevent public disclosure of the number of taxpayers claiming a tax credit and the aggregate amount of the credits when the number of credits claimed is low.

“Tax credits are a one-for-one reduction to the amount of taxes owed. Information about the effectiveness of tax credits should not be kept secret from the public,” said Serena Unrein, Public Interest Advocate for Arizona PIRG. “Taxpayers deserve to know where their money is going.  It shouldn’t matter if there are 1 or 100 taxpayers claiming the credit – the amount of money going to tax credits should be public information.”

Four of the six tax credits discussed in the committee’s Executive Session were recommended for repeal, but no details were released to the public about why some of the tax credits were recommended for repeal. 

National advocacy groups have been calling for more transparency in state government, particularly when it comes to how state dollars are spent.  Arizona recently received a “D” for transparency regarding taxpayer subsidies to businesses.  The report, Show Us the Subsidies, was released by Good Jobs First, a Washington D.C.-based organization.   Arizona received a score of 127 out of a possible 500 points on five key state subsidy programs, which include the 21st Century Energy Demonstration Projects, the Enterprise Zone Income and Premium Tax Credits, and the Research and Development Income Tax Credit.

 “We hope that the next Legislature will be champions of transparency and allow more access to information that should be public,” said Naimark.  “At a time when Arizonans across the state are hurting from the economic recession, it’s especially important that the state be transparent about where tax dollars are going.”

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