More Insights from Mackinac Center’s Corporate Welfare Scorecard

New leadership brings hope for cutting corporate handouts

The recent elections in Michigan provide an apt opportunity to revisit the Mackinac Center’s 2018 corporate handout scorecard. The scorecard is a tally of business subsidies approved by state lawmakers back to 2001. Each lawmaker is assigned a dollar value of the subsidies he or she voted to approve. It was released last May and will be updated periodically to reflect any new votes by lawmakers in favor of or against corporate welfare subsidies in the Great Lake State.

According to the scorecard, the governor-elect, Democrat Gretchen Whitmer, voted to approve the vast majority of corporate welfare subsidies that came before her as a state legislator. Those subsidies totaled more than $4.5 billion. In one way, her campaign for governor was consistent with this record. At an event of economic development officials in Lansing last summer, she promised to “unleash” the Michigan Economic Development Corporation. This agency takes money from lots of taxpayers and gives it to a few businesses in the hope they will create more jobs than might otherwise be born (or saved).

In a mostly two-party system, there is an opposition party, however, and the current crop of Republican members include some who have shown courage in standing up to demands for targeted corporate handouts. Perhaps the most interesting appointment in recent days has been that of Rep. Shane Hernandez of Port Huron to lead what is arguably the most important committee in the state House: appropriations.

Hernandez sports a perfect score in the Mackinac Center’s corporate welfare scorecard, having voted against 100 percent of the corporate handout legislation that previously came before him. In other words, he approved $0 of $1.2 billion in subsidy offerings that he had a say in. This is no small thing. Fewer than one out of 20 lawmakers in the scorecard voted against all corporate welfare.

As chair of the appropriations committee, Hernandez will be in a prime position to knock down attempts to appropriate more corporate welfare dollars, and in fact, he could advance bills that might roll back current levels of appropriations. He is not the only sitting House member with a $0 tally, which suggests that there will be some tension — though perhaps not enough — between the Whitmer administration and the state House.

The scholarship is clear on the types of corporate handout programs we have tallied up in our scorecard. They’re ineffective and gobble up precious resources to run programs that would be better spent fixing Michigan’s roads. Indeed, maybe that points to what ought to be a first grand compromise of each party come January. Whitmer campaigned on a pledge to fix roads, and that task that requires tax dollars.

So perhaps Republican leadership, including Hernandez, can agree with the governor-elect that trading away corporate welfare dollars in favor of sound infrastructure spending is a worthwhile endeavor. Shifting wasteful —even job-killing — corporate welfare handouts to higher uses such as improving Michigan’s transportation infrastructure will create (and perhaps save) more jobs than the Michigan Strategic Fund and Michigan Economic Development Corporation could ever hope to.

Regardless of how appropriations for roads or the state’s jobs agencies turn out, rest assured that the Mackinac Center will continue to tally and report each lawmaker’s support of or opposition to corporate handouts, and do so in a very public way.