Alabama Senate passes bill to increase transparency on how tax dollars are spent

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March 19, 2015

Alabama State House (Photo: Creative Commons/Jay Williams)

MONTGOMERY, Ala. — Wednesday the Alabama Senate unanimously passed legislation sponsored by Sen. Bill Hightower (R-Mobile) that would require the legislative fiscal office (LFO) to release an annual report detailing all tax incentives, exemptions, credits, and deductions in the prior tax year.

“The rationale for the tax expenditure report is to provide increased transparency to the public on how Montgomery is spending Alabamians’ hard-earned tax dollars,” said Senator Hightower in a release Wednesday evening. “Every year, state government gives away over $2 billion in incentives, credits, and exemptions; and there is not a singular place to go to gather necessary information. This legislation mandates a report to help solve that problem.”

If the bill, SB119, becomes law, beginning in 2017 it would require the LFO to submit the public report at the beginning of each legislative session, when the Governor submits his proposed budget.

“Alabama’s tax code is a product of over sixty years of giving special interest groups credits, exemptions, and special incentives,” Sen. Hightower said. “The public often is unaware of these giveaways. With the Tax Expenditure Report, the public will be able to see this, and now be able to hold legislators accountable.”

Tax incentives are one of the ways Alabama’s government attracts industry to the state. Promising abatements on property or corporate taxes makes relocating to the state less expensive, but there has been some question about how much the state gets back in the form of income taxes and other economic activity from these discounts. This report would reveal exactly how much the government was spending, and taking in with these deals.

Sen. Hightower’s bill comes in the middle of “Sunshine Week,” when the importance of open government and freedom of information are stressed at the local, state, and national levels.

Historically, Alabama has shown lots of room for improvement when it comes to tax and revenue policy transparency, but Senate leadership sees SB119 as a step in the right direction.

“I commend Senator Hightower for his hard work on SB119,” said Senate Majority Leader Greg Reed. “It’s a key part of our ‘Paving a Path for the Future’ agenda, and will help make government more accountable to the people.”