ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Sunday, June 30, 1996                  TAG: 9606290004
SECTION: BUSINESS                 PAGE: 4    EDITION: METRO 
SOURCE: JEFF STURGEON STAFF WRITER 

A MOVE TO OUTLAW SUBSIDIES

An Ohio state senator may recommend that several states cease or curtail their payment of business incentives to companies.

The move, according to Republican Charles Horn, would reduce "the damage to our country, states and citizens from the economic development subsidy wars which are rapidly escalating."

Horn hopes to set a date for a conference to debate such a strategy but must first raise thousands of dollars to cover rent for a meeting site and other expenses, according to his aide, Ray DiRossi. As envisioned, the pact would unite 10 states, including several of Virginia's neighbors - Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, West Virginia and Wisconsin - to create a zone in which businesses would have to pay their own way when they expand or relocate.

The treaty would outlaw subsidies, such as free land, training grants and assistance with utilities and roads, which are routinely provided by communities and state governments to induce companies to invest in expansions or to relocate plants and headquarters within their borders. Communities primarily do this to entice companies to create jobs for residents and taxable investments to pad public coffers.

Skeptics doubt Horn will succeed because individual states have too much to lose. They say that many growing companies will avoid a region that doesn't provide development incentives causing its economy to suffer.

Phil Sparks, Roanoke's chief of economic development, said he thinks such an agreement on a nationwide scale "might work."

The risk is foreign countries could attract new investment at the expense of the United States simply by continuing to give incentives, he said.

The use of incentives, he said, "is global."

LENGTH: Short :   39 lines