Sacramento, CA — California lawmakers should end a $780 million tax credit program that was enacted in 2013 according to a state audit released today.
A report by the Legislative Analyst’s Office came to that conclusion after it found the program was not delivering the broad economic benefits to businesses as originally promised. The California Competes Tax Credit program provides income tax credits to companies that promise to add jobs in California. The audit found that nearly 200 companies, including large companies like General Motors and Hulu along with small businesses as well, won tax credits in 2017 ranging from $20,000 to $8 million. However, a third of those credits went to companies that primarily compete with other California businesses, which does not produce overall economic benefits and harms businesses that do not win the credits, according to state audit officials.
The final determination from the analyst’s office recommends that state lawmakers end the program in 2018 or as soon as possible.