Shortly after the film tax credit scandal broke in September, Governor Chet Culver promised a “comprehensive review” of all tax credits. On Thursday we learned more about how this review will be conducted. Recommendations are likely before the state legislature convenes in January 2010.

Join me after the jump for additional details and analysis.

The Des Moines Register covered the basics:

PANEL LEADER: Gov. Chet Culver named state budget director Dick Oshlo chairman of the tax credit review panel.

PUBLIC MEETINGS: The review is due to the state Department of Management on Dec. 4. The panel will evaluate the review and hold two public meetings – one in Des Moines and the other in Cedar Rapids – the week of Dec. 7 to discuss the findings. Dates and sites of the public meetings are yet to be determined.

PARTICIPANTS: The panel will include the Iowa Finance Authority and the following departments, which administer the credits: economic development, agriculture, utilities, management, cultural affairs and revenue.

CREDIT PROGRAMS: The credit programs benefit a variety of people and businesses – from employers that sponsor training at community colleges to taxpayers that lease farmland to beginning farmers to retail dealers who sell biodiesel blended fuel to taxpayers who make charitable donations for conservation purposes.

LEARN MORE: Go to www.iowa.gov/tax/taxlaw/1009RECReport.pdf to find out more about Iowa’s tax credits and their cost.

Radio Iowa published the letter Culver sent to state agency directors. Excerpt:

To assist the panel with their work, I am asking you to submit information on your respective departments’ tax credits to the Iowa Department of Management by close of business December 4, 2009. Submissions should include the following information for each tax credit program administered by your agency:

•         General description of the purpose of the tax credit

•         Minimum, maximum and average value of tax credits issued

•         Contingency liability for each tax credit

•         Number of tax credits issued each year

•         Number of individuals and/or businesses served by the tax credit

•         Whether the tax credit is transferable and, if so, how many times

•         Whether the tax credit is refundable

•         Processes for oversight and regulation of the tax credit

•         The Return on Investment for the tax credit

•         Data on the fiscal impact of the tax credit for the past ten years, if available

•         A description of what information is currently made available to the public for the tax credit(s) administered by each agency.

State legislators may reach their own conclusions about which tax credits are worth keeping, which should be reined in, and which should be scrapped. From the Des Moines Register:

“It’s absolutely essential that we give this more attention, especially now because of the tight budget,” said Sen. Joe Bolkcom, D-Iowa City and chairman of the Senate Ways and Means Committee. “We need to make sure our job creation efforts are working.”

Bolkcom and Sen. Bill Dotzler, D-Waterloo, have long advocated that the state make public more information about tax credits’ recipients and projects. Unlike some other states, Iowa keeps private much of the information about tax credit recipients.

“The public needs an opportunity to review who’s getting what,” said Dotzler, who first alerted many state officials about allegations of abuse within the film program. “If companies don’t like that, it would be real easy for them not to participate in the tax credit program.”

One example, he said: State officials don’t know details about companies that receive research and development credits. Companies argue the information is proprietary, so information about projects awarded credits in that program are kept confidential. […]

Sen. Ron Wieck of Sioux City, the top-ranking Republican on the Senate Commerce Committee, said he agreed with Culver’s call to review the credits.

“I think, generally, tax credits are good. The history shows if they are in place in the proper way they can help generate new jobs,” Wieck said. “But I think too many times we put programs in place and they aren’t monitored closely enough and continue into infinity.”

The companies and industries that benefit from current tax credits will pour tons of money into lobbying during the 2010 legislative session. During the 2009 session, lobbyists were able to get an absurd number of exemptions written into a bill on consumer fraud lawsuits. I would not be surprised if legislators spare some tax credits that the governor’s panel recommends eliminating.

On the other hand, the budget is tight, and there probably will not be any additional federal stimulus funding to help plug holes in fiscal year 2011. I expect at least some of the tax credits to be eliminated or substantially revised.

The film tax credit is a goner in my opinion.

The research and development tax credit may well be revised to force more disclosure by companies that benefit.

I wouldn’t bet against the ethanol and biodiesel industries, which will fight like crazy to retain their tax credits.

I would like to see lawmakers reduce the scope of Tax-Increment Financing (TIF) to restore the original intent of this program: promoting redevelopment of urban blighted areas. The use of TIF has exploded in the past decade, allowing developers to avoid paying substantial amounts of property taxes on developments that would have happened anyway. To cite a couple of examples, TIF was used for the Jordan Creek and Glen Oaks developments in West Des Moines. The law should be changed so that a cornfield cannot be labeled a slum or an “urban renewal area.” TIF is a complicated issue, and I hope to have a guest post here soon by an expert on the uses and abuses of TIF.

I hope legislators keep the historic preservation tax credit. That’s a valuable tool for revitalizing small-town main streets as well as older neighborhoods in cities.

Final note: our state’s budget would be in better shape if the governor and legislators had heeded many warnings from the Iowa Policy Project and the Iowa Fiscal Partnership about the unsustainable growth in business tax credits. I hope that many policy-makers and journalists will attend the Iowa Fiscal Partnership’s December 4 summit on fiscal policy at the Botanical Center in Des Moines.

Post any thoughts on good, bad and ugly tax credits in this thread.