Michigan Senate Bill SB0854

Michigan 2023-2024 Regular Session

• Introduced: 5/1/24
• Refer: 5/1/24

Caption

State: interstate compacts and agreements; company-specific subsidy interstate compact; enact. Creates new act. TIE BAR WITH: SB 0855'24

Impact

The act's primary impact will be on the economic development strategies of member states. By limiting the ability of states to offer company-specific grants and tax incentives, the bill aims to shift focus toward universal infrastructure improvements, such as transportation and education, which benefit all businesses rather than just a select few. This could lead to a more stable and level business environment, encouraging economic growth based on fair competition instead of competitive giveaways that disproportionately favor affluent corporations.

Summary

Senate Bill No. 854, also known as the Company-Specific Subsidy Interstate Compact Act, is a legislative proposal in Michigan aimed at addressing the ongoing issue of state-level subsidies provided to specific companies. The bill proposes the creation of an interstate compact that allows participating states to agree not to offer company-specific subsidies for businesses located within or considering relocating to their jurisdictions. This measure seeks to create a more equitable landscape for all businesses, undermining the competitive bidding wars states often engage in to attract large corporations through significant tax incentives and grants.

Contention

The contention surrounding SB 854 arises from its potential to alter existing practices surrounding state incentives. Critics argue that such a ban could negatively impact states' abilities to attract businesses, particularly in competitive regions where incentives are common. There is also concern about the implications for local economic strategies that rely on targeted subsidies to foster growth and employment. Supporters counter that the current system often merely perpetuates inequities, urging a collective approach to economic development that prioritizes broad benefits over specialized incentives.