(TRENTON) - Legislation Assembly Democrats Troy Singleton, Gary Schaer, Daniel R. Benson, Timothy Eustace and Gabriela Mosquera sponsored to improve the reporting and disclosure requirements on state tax expenditures and impose a seven-year limit on the duration of new state tax expenditure enactments was advanced Thursday by an Assembly panel.
State tax expenditures and preferences are special or selective tax relief or benefits authorized by law designed to accomplish public goals. The relief provided through expenditures typically is intended to encourage investment, create jobs and facilitate economic development, or to relieve the tax on products, services or financial decisions.
"The state does not authorize these tax expenditures lightly," said Singleton (D-Burlington). "They're authorized for specific goals such as creating jobs or boosting economic growth, so we need to make certain these benefits are working as intended. It's common sense to examine whether these expenditures are working. It's what the taxpayers deserve."
"Enhancing the review and evaluation of the specific goals, purposes and objectives each state tax expenditure is intended to achieve is the right thing to do, especially when we struggle to meet so many needs in our state and money is extremely tight," said Schaer (D-Passaic/Bergen). "The taxpayers should have confidence that their dollars are being spent wisely and effectively."
"This information, quite simply, needs to be reviewed regularly so we know whether these expenditures are working," said Benson (D-Mercer/Middlesex). "These expenditures are approved for a very specific purpose, and taxpayers need to know if they're working effectively."
"We have so many unmet needs in our state budget, so studying whether these expenditures are working is quite simply the fiscally responsible thing to do," said Eustace (D-Bergen/Passaic). "Creating jobs and meeting these other goals is a top priority, but they also must be done the right way. We need this information to make informed decisions about taxpayer dollars."
"The goals of these expenditures are worthy, but we also need to be smart in how we approach them," said Mosquera (D-Gloucester/Camden). "If these expenditures are working, then we know everyone is benefiting, but if not, we'll know changes are needed. Taxpayers deserve no less."
The bill requires an enhanced annual evaluation of specific data collection and improved reporting requirements imposed upon the recipient of tax expenditures.
It also mandates the comprehensive presentation of the state costs of tax expenditures, including development subsidies and review of specific data and baseline measurements to be collected and remitted in each year a tax expenditure is in effect.
The bill requires any bill authorizing a tax expenditure to expire on the first day of January next following the seventh anniversary of its effective date.
The bill was released by the Assembly Appropriations Committee.