PITTSFIELD -- The state's public money watchdog is pushing for access to business tax returns to prevent waste, fraud or abuse of certain tax breaks for companies from the Berkshires to Cape Cod.
By next summer, Auditor Suzanne M. Bump wants the Legislature to approve a bill giving her office more oversight of how the Department of Revenue administers 91 various commercial tax credits. The DOR manages these so-called "tax expenditures," which include exemptions from sales, excise and other state taxes and fees in an effort to maintain or encourage the growth of certain industries, such as filmmaking.
Currently, state law prevents Bump's office from reviewing business tax returns, documents she says are key to determine whether the DOR is effectively tracking the tax breaks.
"We can't audit the Department of Revenue the way we can audit the rest of the state agencies," Bump said in a recent Eagle editorial board interview. "We want to look at the benefit of the tax expenditures, how they are used, and do they serve the public purpose they were intended to?"
A thorough review of DOR efficiency "makes sense," according to Sen. Benjamin B. Downing.
"We need to make sure that, for programs in state government, we get the best bang for our buck," said the Pittsfield Democrat, who supports the legislation.
A part-time Great Barrington resident, Bump has advocated for auditing the DOR after her office two years ago discovered some $2.2 billion worth of business tax expenditures that weren't subject to auditing.
A part-time Great Barrington resident, Bump has advocated for auditing the DOR after her office two years ago discovered some $2.2 billion worth of business tax expenditures that weren't subject to auditing.The study didn't include state tax breaks associated with tax increment financing -- or TIF -- agreements, which are initiated on a local level to encourage economic development. Bump says she's currently conducting a separate review of the TIF process.
During The Eagle interview, Bump emphasized that the DOR -- not the businesses -- is the target of the pending legislation. If approved, she says the measure ensures the tax returns are for her agency's eyes only.
While business groups applaud Bump for her "worthwhile goal" to scrutinize the DOR, it shouldn't be at the risk of publicly disclosing sensitive company information that could give a company's competitor an edge, according to the Associated Industries of Massachusetts.
"We're concerned about confidentiality," said John Regan, AIM's executive vice president of government affairs.
He added, "This level of detail is too much to reveal."
Regan noted the state already has plenty of public disclosure requirements in place to hold businesses accountable for meeting the criteria of accepting tax expenditures and other tax breaks.
However, state Rep. Tricia Farley-Bouvier, D-Pittsfield, who backs the proposed DOR audit, believes it's a given Bump and her staff won't divulge company secrets.
"The auditor has to look at a lot of other types of information and they have an obligation to keep it confidential," she said.
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