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Lawmakers seek routine reviews for state tax incentives

Rep. Jim Wayne (D-Louisville) filed two bills this week that would cause most of Kentucky's economic development tax incentive programs to expire unless lawmakers renew them after reviewing their effectiveness, according to www.kentucky.com.

Wayne says his proposals would systematically and comprehensively review the state's tax incentive programs; if a certain tax break is not effective, the provision would expire without the legislature having to take action.

Under Wayne's bills—House Bill 335 and House Bill 336—the Program Review and Investigations Committee of the Legislative Research Commission would have to review tax increment financing, tourism development and economic development programs to see if Kentucky is losing more money than it gains with the exemptions.

In addition, the state budget director would submit an economic development and tourism expenditure report to the legislative research commission no later than Oct. 15, 2011, listing projects that received tax breaks and how much the tax breaks cost the state.

Gov. Steve Beshear (D-Ky.) has projected a nearly $1.5 billion shortfall for Kentucky's next two-year budget. Wayne, who has filed similar proposals in the past, believes the state's current bleak financial condition could boost consideration of the bills.

Although House Speaker Greg Stumbo (D-Prestonburg) says he has not yet seen Wayne's proposal, he believes there is a need to study the effectiveness of some of Kentucky's tax incentives.

1/29/2010