Relating To Tax Expenditure Accountability.
The primary impact of HB 2178 is on existing tax laws regarding expenditures in Hawaii. By stipulating a maximum availability of thirty-six months for tax expenditures, the bill seeks to ensure that benefits are periodically reviewed for their effectiveness. The requirement for thorough analysis and public disclosure aims to make the process more transparent, potentially influencing how future tax benefits are designed and evaluated. It introduces a systematic accountability structure that may hold state agencies accountable for the economic impacts of tax policies.
House Bill 2178 aims to enhance tax expenditure accountability by requiring detailed reporting and analysis when laws involving tax expenditures are enacted, modified, or extended. This bill mandates that each tax expenditure must include the intent behind its enactment, an analysis of its cost versus benefits, and a statutorily defined repeal date. Moreover, it calls for a static revenue estimate for each tax expenditure within the state's financial plan, ensuring that lawmakers have comprehensive information before approving tax-related policies.
The sentiment surrounding HB 2178 is largely favorable among accountability advocates and fiscal policymakers who view it as a necessary step towards transparency in tax expenditure. Supporters argue that this measure will improve the effectiveness of tax incentives, ensuring that they serve their intended purpose while reducing waste. However, there could be some resistance from sectors that benefit from current tax expenditures who might fear that increased scrutiny could lead to a reduction in available incentives.
One notable point of contention regarding HB 2178 is the balance between the need for transparency and the potential administrative burden it may impose on state agencies and businesses that rely on tax expenditures. Opponents may argue that the requirement for extensive analysis could discourage the approval of beneficial tax incentives or complicate the legislative process, potentially hindering economic growth initiatives targeted at job creation and business support. Discussions may also revolve around what constitutes an appropriate analysis and who sets the standards for evaluating the effectiveness of tax expenditures.