Prohibits expenditures to refund tax credits, pay rebates, or repurchase or grant transferable tax credits granted through incentive contracts unless budgeted and appropriated. (gov sig) (OR SEE FISC NOTE GF EX)
If enacted, SB219 would significantly influence how state funds are managed concerning tax incentives. It would enhance regulatory oversight by mandating that state expenditures be tied directly to appropriations in the state budget, thereby reducing potential liabilities or excessive fiscal commitments that emerge from unaccounted subsidies. This reform aims to make it less likely for the state to incur liabilities beyond what has been budgeted, thus fostering more disciplined fiscal management.
Senate Bill 219 aims to implement stricter fiscal controls over state-funded tax incentives by prohibiting expenditures related to the refund of tax credits, payment of rebates, or transfer of tax credits unless these funds are properly budgeted and appropriated. It emphasizes the belief that such subsidies constitute cash outflows that necessitate careful scrutiny to avoid overspending by the state. The bill seeks to require that any financial assistance granted under incentive contracts is aligned with existing constitutional budgetary provisions to ensure fiscal responsibility and accountability.
The sentiment surrounding SB219 appears to be mixed. Proponents argue that it is a necessary reform to ensure fiscal discipline and prevent the state from creating unsustainable liabilities due to unchecked tax credit grants. They emphasize the importance of responsible budgeting in the context of economic incentives. Conversely, opponents might view the bill as overly restrictive, potentially limiting the state's ability to offer competitive incentives that attract business investments, which could curtail economic growth opportunities.
Notable points of contention in discussions around this bill include the balance between ensuring fiscal responsibility and maintaining a competitive economic environment. Critics may argue that stringent controls could impede the state's flexibility in fostering economic development through attractive incentive programs. Additionally, stakeholder viewpoints vary, with concerns raised regarding the potential impact on future investments and the employment landscape if the incentive structure is perceived as less favorable.