Tax Breaks Equal 2/3 of State Budget

Linda Blackford and John Cheves have a great piece on the state tax breaks that total eight times the 2010 deficit.

The state’s General Fund is expected to collect about $3 billion in sales taxes during fiscal year 2010, compared to about $2.4 billion the state will forgo in sales tax breaks for horses, coal and dozens of other items.

“I think that people should really be aware of tax exemptions being given to businesses, whether they’re local or international,” Sause said. “With all this money we’re giving away, we ought to know more.”

The basics about tax breaks are published every two years by the state budget office. Kentucky will forfeit an estimated $6.9 billion in different taxes in 2010. By comparison, the state’s General Fund is budgeted to collect $9.1 billion. The money lost to tax breaks is rising about 7 percent a year as the General Assembly — often at lobbyists’ urging — creates new loopholes in the tax laws without closing old ones.

But that’s as much as most people know.

Almost nobody knows who gets tax breaks because the state Department of Revenue won’t tell. Nobody knows if most of them work as intended because, despite repeated calls to examine them, the legislature has not done so — and has no plans to. Lawmakers don’t know whether targeted tax breaks encourage new industries, such as ostrich farming, or expand old industries, such as coal.

Read the whole thing.

Then call, write or email your legislators and demand they close the deficit by cancelling these tax breaks, rather than by cutting essential services.

Keep track of what's going on during the session at the LRC's home page here.

Find toll-free numbers to call your legislators here.

Email your legislators here.

Find out who represents you in the house and senate here.