Missouri is doing a poor job of tracking the economic impact of tax breaks, according to an audit released on Wednesday.
Missouri Auditor Nicole Galloway said state government has no idea if incentives, exemption and newer tax laws changes are working as intended. She said the state isn’t accurately measuring how much revenue it’s losing.
“As a result, Missouri risks the same mistakes as other states that jeopardize their budgets with special interest giveaways,” Galloway said. “Too often these cost estimates are formulated with out-of-date information and require much greater economic analysis than is currently performed by the legislature.”
Galloway also said cost estimates for some tax breaks are put together with outdated information and are not followed up on after they go into effect. She cited a 2015 bill that recalculated corporate income between states for tax purposes.
Galloway recommends that the Department of Revenue start tracking each tax exemption to see how they are performing. Galloway also recommends the legislature pass a bill that requires fiscal notes for tax legislation to include follow-up review on any significant financial costs to the state.