News Story

Earmarks For Key Legislators Recall Late ’90s Spending Blowouts

Not quite the ‘Christmas tree’ budgets of yore, but trending that way

The Grand Rapids Civic Theatre is a nonprofit recipient of Michigan taxpayer subsidies, courtesy of the state Legislature. The organization has lost money in each of the past four years, according to annual reports it filed with the IRS.

With revenues of about $2 million a year, the theater lost a total of $1.7 million from 2013 to 2016, the most recent years for which financial data is available.

For the past two years, the Legislature has voted to give the organization $1 million in state taxpayer funds. The money was appropriated without public discussion or scrutiny by means of an earmarking process that lacks transparency. The process makes it more likely that higher-ranking legislators can have their pet projects approved, by subjecting them to a single up-or-down vote on funding for the entire state budget.

Specifically, the theater’s subsidies were included in a budget category, called one-time enhancement grants, which has grown in the past two years as a strong economy yielded higher-than-expected state revenues. The spending is reminiscent of pork-laden “Christmas tree” budgets adopted during Gov. John Engler’s third term at the end of the 1990s economic boom, though on a smaller scale.

The state budget for the next fiscal year, adopted this past week in Lansing, contains nearly $52 million in enhancement grants, plus other spending called “community infrastructure investments.” Many of the latter are particular road projects in certain legislators’ districts. They get to cut in line in front of other demands for road repairs and get immediate funding.

“There are processes to ensure that taxpayer money is spent well,” said James Hohman, a fiscal analyst with the Mackinac Center for Public Policy. “Budget earmarks ignore them to deliver taxpayer cash to pet projects instead.”

The Grand Rapids Civic Theatre was not the only organization to benefit from an earmark in the new budget.

Museums, boat launches, community centers, fire departments and libraries are all just a governor’s signature away from taxpayer handouts. MIRS News compiled a list of the specific budget earmarks.

A spending decision that uniquely benefits one community or project rather than a more general class of recipients requires a supermajority vote of the Legislature. To avoid that requirement, and to keep individual legislators from being easily identified, the legislation identifies recipients not by name but by county or city population figures.

For example, one theater gets a grant that is described this way:

“$1,000,000.00 shall be awarded to a civic theater in a county with a population between 600,000 and 610,000 and in a city with a population over 185,000 according to the most recent federal decennial census.”

No one will be surprised to learn that just one jurisdiction in the state meets that definition: Grand Rapids

“Political earmarks that benefit influential legislators are as old as the republic," said Jack McHugh, the legislative analyst for the Mackinac Center for Public Policy. “In some parts of the country, they’re seen as the cost of doing business. But the state of Michigan has traditionally been counted as a ‘good government’ state, which may be why politicized spending earmarks are distributed with less fanfare here.”

McHugh also noted that the budget includes a $115 million deposit into countercyclical budget fund, known as the rainy day fund.

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.