The March 13 article “In shaky economic times, Virginia doling out tax breaks” provided a key insight into a flaw in Virginia’s budget process exposed during our recent recession: Virginia has failed to systematically analyze millions of dollars being spent each year on tax credits and preferential incentives provided to those groups savvy enough to negotiate the legislative process.

During this General Assembly session alone, we considered 25 bills either reauthorizing credits or creating new ones. Name your favorite initiative or industry — we have a credit for it. Coal, motion pictures, barge and rail companies, ports, long-term care, aircraft, land preservation, and research and development all receive substantial tax dollars and could continue to do so for many years without legislative action. One estimate places the fiscal impact of these measures at over $200 million per year.

With every tax credit that is adopted, a policy decision is made about the appropriate use of public resources. Once passed, however, those credits authorize the transfer of money from taxpayers to the beneficiaries of the credits each year with no additional oversight by the General Assembly. Many analysts have expressed reservations about the extent to which targeted tax credits are an effective tool for creating jobs and economic opportunity. We believe that prudent budgeting obliges us to take a closer look at these subsidies to assess whether they support good policy purposes at reasonable costs.

The General Assembly lacks sufficient criteria for determining whether these subsidies are working and when they should expire. Unless the credits expire on a certain date, they remain on the books and drain resources that could fund other priorities — including tax relief for a broader cross-section of Virginians. Simply eliminating yearly tax credits for the coal industry, for example, which amounts to over $100 million a year, could allow us to reduce the corporate tax rate from 6 to 5.25 percent or provide a tax refund of $15 a year to every Virginian.

The presence of these credits effectively limits future legislative bodies by reducing funds otherwise available for schools, public safety and transportation. The difficulty of eliminating them is clear: Removing a tax subsidy is often portrayed as a tax increase, and we know the difficulty of passing such measures.

Our legislature needs a better approach for evaluating these credits. We propose the following:

1. Establish automatic expiration dates for each credit, thereby requiring the General Assembly to reenact each periodically.

2. Before enacting or extending any credit, the revenue impact needs to be clear and projected over the life of the credit.

3. A cost-benefit analysis should be conducted of any proposed tax credit or any that is scheduled for renewal to determine.

4. Performance measurements should be in place to allow a “claw back” of all or part of the credit if the goals for which it was intended are not accomplished. This should apply when companies fail to deliver on promises to create a certain number of jobs as the result of receiving the credits.

5. Credits should not be refundable or transferable, unless there is a clear policy reason.

6. Tax credits should not be used to subsidize businesses that export jobs to other states or countries. Just as our commonwealth imposes eligibility requirements on workers and families that receive basic financial assistance, businesses that receive subsidies should be held accountable.

7. Barring special circumstances, no tax credits should be granted to individual firms.

As we struggle to keep our budget in balance, we owe it to Virginians to fund programs in a transparent fashion and to improve our assessment of these tax subsidies and whether they fit the priorities of the commonwealth.

The writers are members of the Virginia House of Delegates. David J. Toscano, a Democrat, represents Charlottesville and part of Albemarle County. R. Lee Ware, a Republican, represents Powhatan and part of Chesterfield County.