State tax credits working? Who knows?

We urge Comptroller Kevin Lembo to aggressively pursue his recommendations for monitoring the effectiveness of state tax credit programs established by the legislature over the years. These programs are intended to promote business development and job creation in Connecticut by providing financial incentives to companies. The state has done very little, however, to determine the efficacy of these programs.

In October the General Assembly approved bonding $626 million for a jobs bill - "An Act Promoting Economic Growth and Job Creation in the State." It replaces several existing job creation tax credit programs with new incentives for job growth, while other tax credit programs continue.

We agree with Mr. Lembo that it is imperative that the state figure out how to monitor this hodge-podge of tax-break policies so lawmakers and the public can determine which are worth keeping and which the state should jettison.

"The state must now establish a strong, credible and verifiable mechanism to evaluate the success of these policy goals aimed at creating jobs. With millions of taxpayer dollars being invested in these job-creation initiatives, they must be monitored closely to ensure success," Mr. Lembo said.

In a Nov. 20 editorial we pointed to a report by a watch-dog group that demonstrated Connecticut's lack of oversight when it comes to special tax incentives aimed at job creation. The report by Good Jobs First suggests some tax credits are not creating jobs and depriving the state of needed revenue.

Mr. Lembo tells us the state already has the tools in place, it's a matter of using them. In 2005 the legislature created the Business Tax Credit and Tax Policy Committee for the very purpose of annually assessing these programs. It appears the committee, after an initial organizing meeting, never met again to do its job.

Committee appointments come from the governor, legislative leaders, economic development and revenue service commissioners, Mr. Lembo said, and the group is to be chaired by the chairmen of the legislature's Finance, Revenue and Bonding Commission. Those co-chairs are currently Sen. Eileen M. Daily, whose district includes Lyme and Old Saybrook, and Rep. Patricia Widlitz of Guilford, both Democrats.

Among the committee's priorities, said Mr. Lembo, should be pressing the Office of Fiscal Analysis to meets its obligation to regularly report on tax incentive effectiveness. OFA issues reports but they fall short of the mandated detail.

The comptroller has brought attention to the problem, now he must make sure the governor and legislature do not ignore it.