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Bill

SB 54

RELATING TO AN INTERSTATE COMPACT TO PHASE OUT CORPORATE WELFARE.

2026 Regular Session Introduced by Stanley Chang and 1 co-sponsor

Hawaii joins interstate compact to coordinate phased elimination of corporate tax breaks and subsidies to prevent states from undercutting each other with business incentives.

Carried over to 2026 Regular Session.
#corporatewelfare #interstatecompact #phaseout
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WeVote Research Nonpartisan
Bill Summary · SB 54

Legislative bill overview

SB 54 proposes that Hawaii participate in an interstate compact designed to coordinate the phasing out of corporate welfare—tax breaks, subsidies, and other preferential treatments given to businesses. The bill would establish a framework for multiple states to jointly reduce these corporate incentive programs in a coordinated manner to prevent individual states from being undercut by competitors offering more generous subsidies.

Why is this important

Corporate welfare costs states billions annually in foregone tax revenue while often failing to deliver promised job creation or economic benefits. By coordinating multi-state action, Hawaii could reduce corporate incentives without fearing that companies will simply relocate to more generous neighboring states—a common "race to the bottom" dynamic that diminishes state revenues while benefiting corporations.

Potential points of contention

  • Business opposition: Corporations and pro-business groups will likely argue that eliminating tax incentives makes states less competitive for investment and job creation, potentially harming economic development and employment.
  • Interstate coordination challenges: Creating enforceable interstate compacts is complex; states have different economic priorities and may defect if competitors offer better deals, undermining the compact's effectiveness.
  • Definition and scope: Disagreement over what constitutes "corporate welfare" (tax credits, R&D incentives, infrastructure subsidies, etc.) could limit the compact's reach or create loopholes that allow states to continue favoring businesses through different mechanisms.

Compiled from official sources — confirm details with the bill’s official record.

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