Some Kentucky leaders are good at handing out tax expenditures and economic incentives in the name of economic development, but they aren’t so good at following up to see if the spending paid off for the state.

Remember Braidy Industries? The state gave them $15 million for construction on a plant that was never built. Last session, Sen. Chris McDaniel, R-Ryland Heights, filed a bill to try to recover those funds (Thank you, Senator!).

However, most economic incentives aren’t as high profile as the Braidy Industries subsidy. Corporate welfare is often crammed into legislation in the last hours of a session with no follow-up on the return, or loss, on the investment. 

Rep. Ken Fleming, R-Louisville, is looking to change that. He’s filed House Bill 45 establishing the Tax Expenditure and Economic Development Incentive Review Board. The board will review past incentives, estimate the yearly revenue loss resulting from each incentive and provide a detailed report to the legislature.

Tax incentives are skewed towards those who have the most resources and can employ well-connected lobbyists to take advantage of them. That’s why they typically benefit large corporations and wealthy individuals while leaving small businesses and ordinary citizens behind.

Some of the companies receiving these tax-dollar-funded-freebies go out of business, or never even come to fruition as seen with Braidy Industries.

On the other hand, some tax incentives may be successful. But with no watchdog, we don’t know.

Rep. Fleming's bill is a positive step towards fiscal responsibility and accountability of the state's leaders. By closely monitoring the impact of tax incentives, the legislature can ensure that promises to the people are kept and that the state's finances are managed responsibly.