Hey, Hey, Ho, Ho, Corporate Welfare's Got to Go

The Legislature is currently debating a package of bills (Senate Bills 566 to 568) that would expand the discretion of political appointees on the board of the Michigan Strategic Fund to hand out cash subsidies up to $10 million to particular companies they select. While lawmakers are quibbling over deck-chair details, these pickers of winners-and-losers would have extremely broad latitude to give the dough to almost anyone they want.

Gov. Rick Snyder is likely to have a great deal of influence in those selections, which makes the proposed program similar to a Texas “deal closer” fund that has caused political indigestion for Gov. Rick Perry. Gov. Snyder and his successors may well experience similar difficulties, given that many of the corporate recipients of this taxpayer largesse will be firms that at one time or another have liberally spread campaign cash around Lansing.

Given the shifting climate of public opinion on bailouts and corporate welfare, some may wonder why any of this is happening now. It amounts to Gov. Snyder doing what he promised: Stop using the tax code to hand out corporate welfare loot (often in the form of writing “tax refund” checks), and instead write the checks in a more direct and transparent fashion. Also, to reduce the magnitude of the handouts, the proposed program will supposedly spend around $100 million annually vs. the open-ended giveaways of the previous administration’s subsidy machine.

Fair enough: The governor is doing what he said he would, and the new program will be an improvement over the old.

Most legislators, however, don’t have this excuse. This is put up or shut up time for all those Democrats who have made favorable noises toward the “Occupy Wall Street” movement. Ditto for most Republicans, who during last year’s election season swore to tea partiers on stacks of Constitutions that, “I share your values! I too oppose bailouts and corporate welfare!”

The tea partiers meant what they said then. The “occupiers” — and more importantly the many “normal people” who sympathize with some of their complaints — mean what they’re saying now (at least the coherent parts, including “no corporate giveaways”).

Do the legislators in Lansing who have made promises to either or both groups mean what they say? How they vote on Senate Bill 567 and three other bills in the package may provide one answer. The state Senate has already passed its version of the bills with just one lonely “no” voter (Sen. Arlan Meekhof, R-West Olive).

To be fair, those politicians who support the bills can honestly say the new corporate welfare regime represents an improvement over the old one. But no corporate welfare handouts would be even better. At the very least, a number of additional transparency provisions should be added to the bill that passed the Senate, and the discretion of the favor-giving political appointees should be greatly narrowed.

On this legislation, tea partiers and occupiers could come together in a joint rally on the Capitol steps and all be reciting the same chants

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.