States across the country offer select businesses taxpayer cash and other special treatment, and they do this because they feel they need to compete with other states that also offer favors. This is not how states should compete with each other, and they should make an agreement with each other to stop their select business subsidy programs. That’s why we’ve written a disarmament treaty and are teaming up with groups across the ideological spectrum to stop these deals.
Our oldest ally on the issue is a progressive lobbyist out of Chicago, Dan Johnson. He got inspired to work on this issue after the Chicago Board of Exchange demanded special favors from the state legislature and got them. Johnson didn’t like that ultimatum or the politics around it. So he started working with lawmakers around the country to introduce legislation that would end them.
He saw the compact we had written and reached out to us. We’ve been working to get more support from legislators and groups across the aisle to advance the issue. We reached out to our sister think tanks in the State Policy Network to support the legislation, and it’s been an easy sell for most of them. Some national groups have supported the compact, as well.
When the idea gets translated into legislation, it’s usually been advocated by Democrats, but there has been bipartisan support. In Michigan, two Republicans (Rep. Steven Johnson and Sen. Aric Nesbitt) and two Democrats (Sen. Jim Ananich and Rep. Yousef Rabhi) have introduced bills. And more support will come as we get more people engaged in the issue.
Often, cross-ideological allies like the same policy for different reasons. On housing restrictions, for instance, some people on the left may not like restrictive zoning because it stops low income housing, while some on the right don’t like restrictions on property rights. Yet on business subsidies, both sides disapprove for the same reason: They don’t think that states should be competing over who can offer the most expensive deal to companies. Both would prefer that states compete over business climate and quality-of-life issues.
Right now, the supporters of selective business favors tend to be those who are likely receive favors and the state and local government agencies that hand them out. And they’ve been successful in getting states to create business subsidy programs. The interstate compact to end these programs is both a rallying point to gather a broad coalition and a solution that can end favoritism. It’s been good to start this process with people across the ideological spectrum.
