Representative Place and Senator Bell sponsor legislation, announce launch of RI interstate compact to phase out corporate giveaways
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STATE HOUSE – Rhode Island Deputy Minority Leader David Place and Rhode Island Sen. Sam Bell have joined forces to launch an initiative aimed at limiting costly corporate giveaways used to lure companies from neighboring states. They are seeking to enlist Rhode Island in an interstate compact that protects public investments now, and in the future.
It is well documented that corporate giveaways are among the least effective uses of taxpayer dollars to create and maintain jobs. They also fuel business inequality as only the largest businesses receive the vast majority of these funds. This legislation (2023-H 5319 / 2023-S 0273) is viewed as a reasonable first step in phasing out corporate giveaways, with an anti-poaching agreement among state governments that would prohibit state company-specific tax incentives and state company-specific grants as an inducement for entities to relocate existing facilities. There is a fiscal year-end sunset provided in this bill to determine its efficacy.
“Corporate welfare does nothing but take public money away from those who need it most,” said Senator Bell. “When corporations get special handouts from our state government, our residents have to pay more in taxes to make up for these hidden tax breaks, subsidies, and loopholes. With a bipartisan agreement between the Governors of Kansas and Missouri proving that interstate compacts can successfully stop this race to the bottom, our proposed legislation seeks to address this unfair and costly system.”
“Free market and progressive thinkers realize that the current corporate giveaway incentive system benefits the elite and well-connected, not the everyday citizen,” said Representative Place. “Whether it is investing in our small businesses, or properly investing in our necessary core government services, our increasingly limited fiscal resources demand a fresh look at where taxpayer dollars are best spent. It has been estimated that repealing these special tax breaks would save RI taxpayers millions over the years. We feel the corporate giveaway system is a good place to start in our bipartisan call for creating smart and thoughtful changes in how we do business in the Ocean State. ”
Currently, there are six states considering this legislation, including New York and Connecticut.
The legislation is up for a hearing in House Finance on Tuesday, April 18, 2023.
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