Legislators should nix new tax credit

Policy Matters testifies that House Bill 469 lacks safeguards

Policy Matters Ohio today urged Ohio legislators to defer action on House Bill 469, which would create a new tax credit for insurance companies that invest in “transformational mixed use development projects” valued at $50 million or more.

“The bill has numerous defects. It lacks needed guardrails and transparency,” said Zach Schiller, Policy Matters Ohio research director, who testified on the bill before the Senate Ways & Means Committee.

Schiller noted that the cost of the bill is uncertain, making its approval fiscally irresponsible. “Provisions directed at making sure it is not a revenue loser are short on specifics and have no clawback mechanism, making them weak tea,” he said. The bill also lacks language to keep the credit from becoming an entitlement available for large-scale development, so it could finance upscale retail and luxury residential development in booming, affluent areas.

“If the projects it would support are so crucial, the General Assembly should fund them through the capital budget,” Schiller said.

HB 469 would add yet another new tax credit when the Tax Expenditure Review Committee has not yet undertaken a rigorous review of tax credits in general or economic development tax expenditures in particular. “Before you adopt yet another new tax expenditure, the TERC should thoroughly examine a significant portion of the $9 billion in annual tax expenditures the state has on the books,” Schiller told the committee.