New Disclosure Requirements for Economic Development Deals

Leave it to the number crunchers to up the transperancy quotient.

What’s triggering the new disclosure rules for economic development deals? A change in GASB ( Governmental Accounting Standards Board) rules.

What’s the new GASB rule require?  As of 2017, governments will have to begin “tracking, tallying up and reporting the tax incentives awarded on their annual financial statements as lost tax revenue”

But, there’s a catch, one thing that need not be disclosed: The identity of the company receiving an incentive. The GASB rules only require voluntary disclosure of the identity of the economic development incentives.

3 Reasons critics think the name of companies receiving incentives should be disclosed:

•  economic development deals don’t help small business 
• don’t require details on how tax rebates are spent (think about the debate around how film tax credits are spent)
• reporting the incentive as lost revenue will negatively impact government’s finances

Governing | 3 Things the New Tax Incentive Disclosures Rule Won’t Reveal