Monday, June 30, 2014

Hershman: Indiana Takes Conservative Approach to Tax Incentives

By Senator Brandt Hershman in the Indianapolis Star:

As chair of the Senate Tax and Fiscal Policy Committee, I've heard from people who say Indiana should pull back on tax incentives and people who want to see Indiana offer more incentives to compete with other states. Our state's approach to date reflects Hoosier common sense: We recognize that some financial incentives for employers are necessary and effective to help the economy, but we have been deliberate in creating those incentives.

The Star editorial ended with a call for government leaders to "carefully measure whether Hoosiers really are getting a strong return on their substantial investments." I think readers will be pleased to know that such a review is exactly what state legislators had in mind when we unanimously passed a law this year requiring a bipartisan committee to examine state and local tax incentives on an ongoing annual basis.

This review is required to include the amount of benefits claimed, the economic return on investment and the policy goals for each tax incentive. I'm excited to be a member of this committee for 2014, and I look forward to a productive series of meetings this summer and fall. I'm confident that our review will lead to future improvements in Indiana's tax code.

Episodes like those of Carbon Motors and Elevate Ventures should lead to reflection. Members of the public and the media are right to scrutinize the tax incentives given out by their government.

I just hope that scrutiny doesn't always equal negativity. Indiana is taking a modest approach to offering incentives, we have a tax climate that benefits working Hoosiers, and we're taking new steps to improve the system we have in place.