PHILADELPHIA, PA — July 31, 2019 — Pew Charitable Trusts recently praised Pennsylvania as a “leader” in tax incentive evaluation and the provision that set the analysis over the top came from Senator Vincent Hughes (D-Philadelphia/Montgomery).
Sen. Hughes introduced an amendment to what is now Act 48 of 2017, which mandated the Pennsylvania’s Independent Fiscal Office (IFO) review tax incentive programs to ensure the programs were having the desired results. In short order, the IFO made recommendations to improve key tax incentive programs, including the New Jobs Tax Credit and the Historic Preservation Tax Credit, following evaluation as required by Act 48. All future tax credits the state offers will be evaluated by the IFO.
“I am pleased to see Pennsylvania is being hailed as a leader for its evaluation of tax credits and look forward to a future of effective policy,” Sen. Hughes said. “Tax credits have often been seen as a means to drive the economy without much critical analysis for whether they are working or could be expanded. This provides us with a better pathway forward through independent review.”
From the Pew report:
“With the publication of these studies, Pennsylvania joined an increasing number of states producing evaluations that look at whether tax credits are producing the desired results—and that offer recommendations on how they might be strengthened.
In this initial set, the IFO provided policymakers with helpful insights and questions to guide discussions of these programs. The analyses suggest that policymakers think critically about the intent of each credit and include options for changes to improve performance.”
The report goes on to say:
“With the publication of these reports, Pennsylvania has become a leader in tax incentive evaluation. The state plans to examine 19 more credits over the next four years, spanning a wide array of programs. This work marks the start of a broad and comprehensive effort to ensure that the state’s credits are worth the cost.