Wanted: More Transparency, Less Misuse
The East-West Gateway Council of Governments report, which I discussed previously, confirms another concept that Show-Me Institute staff and scholars have highlighted repeatedly: Local incentives suffer from a lack of oversight and transparency.
If it had greater oversight, the Show-Me State could save itself money — and some embarrassment. Because of its current disorganization and lack of transparency, the state provides financial assistance to businesses and individuals (including convicted embezzlers) that have failed to meet the legal requirements. Additionally, the government would struggle less to keep track of the applications, as it does now.
From the report (emphasis mine):
In Missouri, reviews of the use of economic development incentives in the state over the past 20 years conducted by the Joint Committee on Tax Policy, the DED Incentive Review Committee and the State Auditor have all called for legislation that would increase reporting requirements, availability of data, and accountability for tax credit programs. Accountability and reporting appear to be improving with the implementation of the tax accountability portal, the requirement of the State Auditor to review all tax credits and the Joint Committee on Tax Policy’s review and hearings of tax credit programs and improvements made to TIF and TDD legislation in 2009. Yet, sufficient legislation has not been passed to provide true accountability or transparency.
With better organization, the state would be less likely to make inappropriate expenditures. If the information about local development incentives were improved, policymakers could make better decisions.