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Arizona high court says cities must benefit from subsidies

Gavel shot
Posted at 10:25 PM, Feb 08, 2021
and last updated 2021-02-09 00:25:28-05

PHOENIX (AP) — The Arizona Supreme Court says cities, counties and the state Legislature must ensure the public actually receives a real benefit in exchange for subsidies the government provides to lure businesses or they violate the state constitution's gift clause.

Monday's ruling has wide ramifications for governments that have increasingly felt compelled to cut deals to lure new business.

The high court said that providing subsidies must do more than generate greater economic activity, they must bring the city some real return on its investment.

Otherwise, they are illegal.