News Story

State Government Playing Favorites With Food Providers

Marquette co-op receives hundreds of thousands from state taxpayers

There are about 10 grocery stores in Marquette serving a population of about 21,355 in the Upper Peninsula city.

And one of them has been in the news recently for the financial aid it's receiving from state taxpayers to help with an expansion project.

The Marquette Food Cooperative will get $615,000 for an expansion from the Michigan Economic Development Program and a $115,000 tax abatement from the city of Marquette.

But is that fair?

On its website, the Marquette Food Cooperative boasts about paying its employees above the minimum wage. That, says Michael LaFaive, director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy, is evidence that the Co-op shouldn't need government handouts at the expense of its competitors.

If they can do the expansion and pay its employees above minimum wage, more power to them, LaFaive said.

"(But) why drag Michigan taxpayers into the equation?" he said. "We all want people to do better, but at what price? … If the expansion is a worthwhile effort, it should require no government money."

Matt Gougeon, general manager of the Marquette Food Cooperative, said in an email that "fairness is not at issue in our being awarded this funding."

Gougeon said the project would spur economic development.

"More to the point, the funding from the CRP (Community Revitalization Program) is being used to pay for hard costs associated with our expansion; construction materials and labor, fees, etc.," Gougeon said. "The MFC is a cooperative and is owned by 3,600 households, mostly in the U.P., but also throughout the state. We serve thousands more people who live in our region and membership is open to anyone. We are not only a grocery store but also provide a wide range of programs and services, like healthy eating, farm-to-school programming, local food aggregation and distribution, and general food education that benefits anyone who wants to participate.

"We also work closely with the Center for Regional Food Systems, Michigan State University Extension, Michigan Department of Agriculture and Rural Development, and the United States Department of Agriculture on farm food safety certification for small farms in Michigan, which will benefit everyone in Michigan — pretty cutting edge stuff, I might add, for a community owned grocery store to tackle. Part and parcel to our qualifying for this grant was community investment."

The MEDC stated it projects the expansion, which includes plans to renovate two vacant buildings, will generate a total capital investment of $3.4 million and create 30 jobs.

Studies done by the Anderson Economic Group and the Mackinac Center that evaluate the number of jobs predicted by the MEDC and what have actually materialized show the state's predictions to be grossly overstated.


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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.