[Date Prev][Date Next][Date Index]

An Incentive Update by State...

Incentive War Debate Heats up in Connecticut

The text of these and similar resolutions, bills are 
available via www.geocities.com/CapitolHill/2817

Representative Bob Keely filed the Ohio Resolution 
on Interstate Incentive Competition in the Connecticut 
Legislature which passed in committee but failed to 
reach the floor. Representative Keely then offered 
parts of the resolution as an amendment to a bill which 
denied tax credits to a prominent bank.  The bill was
not called to the floor and the legislature adjourned, 
whereupon a media explosion broke loose resulting 
in a calling of a special session of the Connecticut 
legislature to debate that issue along with regular 
welfare reform legislation.  

The American Legislative Exchange Council (ALEC) 
is in the process of forming a task force to study the 
issue of interstate business competition.  ALEC joins 
the National Conference of State Legislatures (NCSL) 
as well as the Midwestern Legislative Conference 
(MLC) in studying this issue. 

What’s happening in other states

The Ohio Legislature debated and unanimously passed 
Ohio Senate Resolution 21 last year which calls upon the 
federal government to identify and eliminate the federal 
programs which turn states against states in incentive 
wars.  Then after their elimination, individual states can 
work on solutions and de-escalate the wars between us.  
Other states are now introducing similar resolutions in 
their statehouses to support this initiative.  Many of you 
are skeptical of federally imposed solutions or mandates -
we share that legitimate concern.  This Resolution does 
not ask the federal government to solve our problems - 
just stop causing them. * Passed Senate Concurrent 
Resolution 21 * Chief Sponsor - Republican * 18 Senate 
Republican Co-sponsors * 10 Senate Democratic Co-sponsors 
* Passed Senate 33 - 0 * 8 House Republican Co-sponsors 
* 4 House Democratic Co-Sponsors * Passed House 99 - 0

The Nebraska legislature is also entertaining similar text 
of the resolution - Legislative Resolution 37:  
FIRST SESSION: 1. That the Legislature strongly urges the 
Nebraska Congressional delegation to embrace and support 
legislative initiatives and other efforts underway in the United 
States Congress that will begin to mitigate this economic warfare.

The Texas Senate recently passed Senate Bill 1557 that would, 
if enacted, prohibit school districts from granting new property
tax abatements for economic development or new tax increment 
financing plans after September 1, 1997.  The legislation grew 
out of a committee study released last fall that showed that the 
majority of school districts that grant tax abatements experience 
both short-term and long-term financial losses.  The study reported 
that such abatements cost school districts nearly $500,000 in 
property tax revenue over the 10 years ending in 1995.  The 
sponsor, Senator David Sibley (R) said in his press release, “It 
is not right for a business to demand an educated work force, 
yet also demand tax breaks that create a hardship on the local 
school district."

The Minnesota House of Representatives via Representative 
Jim Knoblach has passed a resolution similar to Ohio’s 
memorializing Congress to support legislative initiatives 
to mitigate the economic competition occurring among the 
states as result of targeted business incentive programs.  
* Minnesota House Resolution 538  * 1 House Republican 
Co-sponsors  * 3 House Democratic Co-Sponsors  * Passed 
House 124 - 2  * Minnesota Senate File 1239 * Chief 
Sponsor - Republican  * 2 Senate Republican Co-sponsors  
* 2 Senate Democratic Co-sponsors  * Passed Senate 62 - 0  
* Signed by Republican Governor Arne Carlson

The Wisconsin Senate via Senate Majority Leader Chuck 
Chvala has introduced a similar Resolution in the Wisconsin 
legislature.  Chvala’s resolution indicates that “America’s future 
in global economy depends on its educational, industrial, 
technological and research capabilities throughout the 50 states.”  

Senate Bill #467 creates an interstate business protection 
compact.  It provides that the purpose of the compact is 
to assist in the reduction or elimination of unnecessary 
interstate relocation of existing business; to encourage 
programs for the protection of business from unnecessary 
interstate relocation; to assist in achieving and maintaining 
an efficient and productive business climate that protects 
existing business without preventing incentives for new 
business or for expansion of existing business; and to 
provide means for the encouragement and use of research 
of business relocation.  Provides that each party state 
agrees to formulate and establish an effective program 
to protect existing business from unnecessary relocation.  

Memorializing Congress, via Representative Dan Bosley, 
to urge the United States Congress, governors of other 
states, and other state legislatures to support legislative 
initiatives to mitigate the economic warfare among the 
states that has resulted from the adoption of targeted 
business incentive programs.  By the House of 
Representatives of the Commonwealth of Massachusetts 
(the Senate concurring.)  This language is similar to 
Ohio’s Senate Concurrent Resolution 21.

House Concurrent Resolution 95 has passed the House 
Human Services Committee by a vote of 11-6.  This issue 
has broadened into a full blown debate in Connecticut on 
the use of tax incentives and tax abatements.

Two Grand Forks lawmakers want the federal government to 
end the war between the states. Unlike the Civil War, this one 
is fought with tax breaks and cash, offered to lure businesses 
from competing states. The result is a continuing escalation 
of offers and counter-offers to raid businesses, according to 
Rep. Eliot Glassheim, D-Grand Forks who cosponsored the 
resolution along with Rep. Jim Poolman, R-Grand Forks.

Many other states (Iowa, Pennsylvania etc.) are drafting or 
introducing similar resolutions. 

Recently, two U.S. Senators and several Congressmen 
requested that the General Accounting Office (GAO) 
determine what federal programs may have been inadvertently 
fueling the incentive war between the states.  Is the federal 
government "helping" to lure businesses and jobs between 
states?  This will be one of the questions the study will attempt 
to answer.  With the design phase of the study completed, the 
report has identified 8 federal programs and departments 
worthy of some review.  

Ray DiRossi
Aide to Senator Charles Horn
Ohio State Senate

*If you would like not to receive further updates - please let me know*