A top GOP state House leader said Friday he would like to see states band together with a formal agreement to forego using public funds to lure businesses.
Representative Bryan Posthumus (R-Rockford) said states are forced into spending many millions of dollars in a never-ending competition to poach companies from each other.
“It just becomes a race to the bottom. We’re essentially buying jobs from other states to come here,” he said. “Other states are trying to buy jobs to take from Michigan to go there and they’re using tax dollars to do it. It just doesn’t make sense.”
Posthumus, the No. 2-ranking Republican in the House GOP majority, appeared on the Michigan Public Television show “Off the Record.”
The Legislature just refused to renew funding for Governor Gretchen Whitmer’s main economic development program in the new state budget. There was bipartisan opposition to the state’s generous spending on incentives. The governor and Republican and Democratic legislative leaders say they will negotiate on a new economic development strategy.
State Senator Jeff Irwin (D-Ann Arbor), a member of the Senate Appropriations Committee, said the idea of a formal interstate compact has been around “for about 20 years.” He said it is an intriguing concept, but large states such as Texas make business subsidies a central component of their economic development programs.
“I think that one of the reasons why it’s a struggle to get states to kind of lay down their arms, so to speak, with respect to cash on the table for companies is because there are some states that have just leaned so heavily into the strategy and don’t seem willing to walk away from it,” he told Michigan Public Radio.
Posthumus acknowledged the idea is a longshot.
“Maybe it’s pie in the sky, but that’s what I would like to see,” he said. “I think corporate welfare is not the way that our state or our country should be going.”
