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California Oversight Committee Finds Tax Breaks Are Costing Billions

SACRAMENTO (KCBS)-The Senate Office of Oversight and Outcomes looked at 10 tax breaks enacted by the State Legislature and found they’ve been costing the state $6.3 billion over the past decade.

Tax breaks are usually implemented for businesses to grow and develop and for residents to buy homes, but the oversight committee found that the cost is way more than expected and most of the time their purpose was never stated.

KCBS’ Barbara Taylor Reports:

John Hill, the principle consultant who did the study, said no one paid attention to the runaway tax breaks, so they just keep on giving.

Years trickled on by and no one in Sacramento noticed that businesses and individuals were scooping up billions of dollars in unintended tax breaks. But rescinding them now could be difficult according to Hill.

“To revoke a tax break requires a two-thirds vote because it’s considered to be a tax increase. Some people refer to that as a one-way ratchet. It’s easier to get a tax break on the books than it is to take it off the books,” he said.

One of the biggest money drains is the research and development credit that cost the state almost a billion dollars more than expected last fiscal year.

Meanwhile a tax on corporations that was supposed to generate new income instead cost the state $230 million dollars in the last budget cycle.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

More from Barbara Taylor
  • Kodiax

    you brain dead asshats are just NOW figuring out that cutting taxes hurts gov revenue?
    why in the hell do any of you politicians get paid?????

  • genomega1

    No the leftists have no idea that there two sides to balance sheet.
    Income on one side and expenses on the other.
    They can never consider cutting expenses so we have to keep on taxing, borrowing and spending and blame the evil corporations for making a profit.

  • sunn

    The left has no Idea???? YEAH hmmmmm, letseehere, ARNOLD did’nt tax he just borrowed 27billion without a means to pay for it. tAX AND SPEND, as I recall it Prop 13 cut commercial real estate by 20%, while residential property taxes went up by the same amount over the same period of that tax is frozen(commercial) at a low rate.I also recall MAbell was sued by the state for not paying utility taxes collected in the phone bills to the tune 700million the phone company lost that fight. I don’t know if the state ever got the money.
    And by the way Mr. genomega 1, Last time I checked the state is due several BILLION in UNCOLLECTED SALES TAXES,CORPORATE TAXES, all from
    the good ol evil corporations.;.your friends talked Arnold into cutting their taxes and they would produce 256,000 jobs , the jobs never happened; the oil companys in california hav’nt pay a DIME to the state for oil pumped from STATE OWNED lands since CHRIST was a child..and they cry like babies, when you mention taxes. What I just mentioned is a matter of record not BS.

  • Milan Moravec

    University of California Berkeley Chancellor Birgenea gives breaks to Foreign students and not instate Californians. UC Berkeley Chancellor Birgeneau displaces qualified for public university at Cal Californians with $50,600 Foreign applicants.

    rmail opinions to uc board of regents

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