Relating To Tax Expenditure Accountability.
The bill seeks to amend Chapter 231 of the Hawaii Revised Statutes, establishing new sections that impose rigorous requirements on tax expenditure legislation. This would potentially limit the state's financial commitments by enforcing an expiration on tax expenditures, which mandates re-evaluation of their merits at regular intervals. The hope is that this will lead to more informed fiscal decision-making, ultimately ensuring that tax-related incentives benefit the state economy as intended, rather than extending indefinitely without assessment.
SB268 aims to enhance accountability regarding tax expenditures in Hawaii by requiring laws that enact, modify or extend tax benefits to include specific information before they are enacted. Key provisions include explanations of the intended economic impact of these tax expenditures, analyses to determine if the benefits outweigh the costs, and requirements for a repeal date not exceeding thirty-six months. These changes are designed to ensure that taxpayers and lawmakers have the necessary information to evaluate the effectiveness and efficiency of tax expenditures over time.
Despite its intended focus on transparency and accountability, SB268 may face pushback from various stakeholders who rely on tax expenditures for financial relief or to stimulate local economic activity. Critics may argue that stringent rules around disclosures and reviews could complicate access to vital financial benefits, particularly for smaller businesses or industries that depend on these credits. Furthermore, the balance between enhanced scrutiny and maintaining effective economic incentives will likely be a point of contention during discussions surrounding this bill.