PROVIDENCE – Rhode Island Deputy Minority Leader David Place, a Republican representing District 47, has joined forces with Sen. Sam Bell, a Democrat from District 5, to launch a new initiative aimed at limiting corporate giveaways used to lure companies from neighboring states.
The pair is seeking to enlist Rhode Island in an interstate compact that protects public investments now, and in the future, according to a release this week.
“It is well documented that corporate giveaways are among the least effective uses of taxpayer dollars to create and maintain jobs,” a statement on the effort noted. “They also fuel business inequality as only the largest businesses receive the vast majority of these funds.”
According to the representatives, the legislation – H5316 and the corresponding S46 – 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.
“Free market and progressive thinkers realize that the current corporate giveaway incentive system benefits the elite and well-connected, not the everyday citizen,” said Place, who represents Burrillville and Glocester. “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. ”
“Corporate welfare does nothing but take public money away from those who need it most,” said Bell, who represents Providence. “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.”
Currently, there are six states considering the legislation, including New York and Connecticut.