Jolt
Afternoon Jolt: Tax Break Version
The Joint Legislative Audit and Review Committee (JLARC), the committee of state senators and representatives that reviews tax breaks to see if they're working, released its report late last week.
Of the 25 tax breaks they looked at—worth $2.3 billion—they decided three, worth a total of $44 million, should expire.
That brings us to today's loser: Renewable energy.
The JLARC decided to let a sales tax exemption, worth about $41 million, on equipment used for generating renewable energy, including wind, biomass, and tidal energy, expire.
Their reasoning? The break was intended to be temporary and there were no measurement goals in place.
They also recommended letting a $3.2 million tax break for "hog fuel"—wood chips used for fuel—expire. They reasoned that the break was initially put in place when oil and gas prices were low and believe the break—intended to make hog fuel competitive—is no longer necessary.
Again, they note that the legislature did "not provide performance goals to guide ... assessment of performance."
And this brings us to today's real loser: The taxpayers.
As lefty think tank Washington Budget & Policy Center notes about the JLARC recommendations, the committee's frame is limited. Their only metric is to look at the goal of the tax break, as opposed to judging the worthiness of that goal. It's a bit like asking if McDonald's provides a quick, cheap dinner without asking if it's good for you.
Furthermore, even if a tax break is working—and is even if it's a good thing—shouldn't it be considered against other priorities, such as education, health care, and public safety, when it comes time to weigh what's funded and what's not?
There are roughly 300 tax preferences on the books worth about $6.5 billion annually. We'll give those, like the tax break for big banks on first mortgage loans, today's winner.
Of the 25 tax breaks they looked at—worth $2.3 billion—they decided three, worth a total of $44 million, should expire.
That brings us to today's loser: Renewable energy.
The JLARC decided to let a sales tax exemption, worth about $41 million, on equipment used for generating renewable energy, including wind, biomass, and tidal energy, expire.
Their reasoning? The break was intended to be temporary and there were no measurement goals in place.
They also recommended letting a $3.2 million tax break for "hog fuel"—wood chips used for fuel—expire. They reasoned that the break was initially put in place when oil and gas prices were low and believe the break—intended to make hog fuel competitive—is no longer necessary.
Again, they note that the legislature did "not provide performance goals to guide ... assessment of performance."
And this brings us to today's real loser: The taxpayers.
As lefty think tank Washington Budget & Policy Center notes about the JLARC recommendations, the committee's frame is limited. Their only metric is to look at the goal of the tax break, as opposed to judging the worthiness of that goal. It's a bit like asking if McDonald's provides a quick, cheap dinner without asking if it's good for you.
Furthermore, even if a tax break is working—and is even if it's a good thing—shouldn't it be considered against other priorities, such as education, health care, and public safety, when it comes time to weigh what's funded and what's not?
There are roughly 300 tax preferences on the books worth about $6.5 billion annually. We'll give those, like the tax break for big banks on first mortgage loans, today's winner.
