News Bite

Corporate Welfare A Bipartisan Business In Michigan Legislature

16 of 18 relevant bills in the category would authorize more of it

A search of the website finds that corporate welfare is a popular and bipartisan affair among legislators. Of the 18 relevant bills introduced in 2021 that were included in them economic development bill category, 16 would expand the practice of offering corporate welfare to particular corporations and developers.

Two bills would limit corporate welfare, but the prospects of either getting a vote are considered low. The five other bills addressed related issues and would not necessarily expand or limit the practice.

House Bill 4979, introduced by Republican Steven Johnson (R-Wayland), is one of two limiting bills to limit corporate welfare; it would ban certain subsidies that have cost state taxpayers as much as $9 billion over 20 years. HB 4979 was introduced June 9 and referred to Committee on Commerce and Tourism, but the committee has held no hearings on it.

House Bill 4544, introduced by Rep. Jeff Yaroch (R-Richmond), would also limit the practice by no longer earmarking casino revenue to the state agency in charge of corporate welfare. Instead, the money would go to roads. That bill was introduced March 18 and referred to Committee on Transportation, but it has not received a hearing there.

Only one of the 18 subsidy-related bills has become law in the first 10 months of the current Legislature, although this is likely to change in the usual year-end rush to complete work on bills. Senate Bill 459 granted a developer a deadline extension on a project, allowing him to collect previously authorized selective tax breaks.

Handing out cash subsidies and selective tax breaks to special interests is one area where bipartisanship is the rule, not the exception in the Michigan Legislature, with most lawmakers from both parties willing to go along. Since Gov. Gretchen Whitmer took office in 2019, she has approved 17 new laws in this category, most of them favorable to beneficiaries of the practice. All were passed by the House and Senate with lopsided majorities in favor.

The categories uses to classify bills are aligned with those established by the Legislative Service Bureau, based on the law or section of law a bill would amend. The alignment is not perfect however. Consequently, there may be more subsidy-providing bills than are reported here.

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.