Legislative Year Finishes With High Fiscal Notes

On Jan. 1 the Mackinac Center’s Morey Fiscal Policy Initiative posted and distributed its first policy recommendations of the year. The essay was titled “2019 State Budget: Cut Corporate Welfare for Roads and Economic Growth,” and it described the shortcomings of the state’s subsidy programs and how money now dedicated to them might be better spent.

It was a theme we would carry throughout the year, and our message seems to have found its mark.

Not only was the state’s tourism subsidy program zeroed out completely, legislators and the governor agreed to trim another corporate welfare line item by millions. In addition, lawmakers will allow a different corporate handout initiative, euphemistically known as “Good Jobs for Michigan,” to sunset on Dec. 31 of this year. It makes for a terrific end to a good year. All of this, too, was backdrop on a $2.5 billion tax increase proposal which was made by the governor but not considered in either chamber of the Legislature.

The governor’s first budget proposal included a recommendation to trim $5 million from the state’s Pure Michigan tourism program. The state House voted on its own budget recommendations, and its members voted in favor of $4 million worth of cuts that line item. The state Senate balked at such cuts; during House-Senate negotiations, the appropriation was instead increased by $1.5 million to $37.5 million.

Fiscal year-end drama saw the governor zero out the appropriation completely and legislators let the veto stay in place. The Pure Michigan program has run advertisements in out-state markets with the hope of luring tourists to the Great Lake State, among other duties. The Mackinac Center’s research found it to be a very ineffective program.

The state House — to its enormous credit — recommended a $55.6 million cut (more than 52%) in appropriations for the “business development and community revitalization” line item in the budget. This item funds two initiatives, one of which is known as the Michigan Business Development Program. The Mackinac Center recommended eliminating it entirely after finding a negative association between it and job creation in counties in which MBDP subsidy recipients were located.

In addition to these changes, lawmakers saw fit to let one of the state’s newest corporate subsidy programs expire, after it had already authorized close to $200 million in goodies for a handful of corporations. Senate Majority Leader Mike Shirkey told a Lansing political newsletter that the program “deserves a very robust analysis and debate as to whether it performed as expected. I have doubts about how well it would survive that type of scrutiny.”

These are all solid changes to public policy that deserve our applause. The Pure Michigan and Good Jobs for Michigan programs should remain a part of Michigan’s past and stay out of its future.