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State Senate Bill Would End Some Business Tax Credits

Education groups are calling for more sunshine in the Golden State, with a bill that demands greater accountability for the Billions of Dollars of tax breaks the state gives to commercial interests. Senate Bill 468 would end many business tax credits by 2023 and require that any extensions be justified with hard data. State legislative analysts would be directed to determine whether the tax credits are really bringing the benefits they promised. The bill has a hearing set for May 1st and targets nine of the most generous tax breaks. One, known as the “Water’s Edge” credit, determines how multinational corporations pay their state taxes. Others subsidize airline fuel on international flights or give sales-tax exemptions for animal feed, farm machinery and custom software. The State Department of Finance estimates that, from 2008 to 2021, tax incentives will have cost the state $500 Billion. According to the California School Boards Association, if all of these show that they’re not producing the desired results, it could lead to $3 Billion more per year. That would mean significant increases in per-pupil funding. Schools automatically get more funding as the general fund grows. California ranks 44th in the nation in per-pupil spending, despite being the wealthiest state and the world’s fifth-largest economy.