Commentary

New Business Subsidies Authorized in Michigan

Lawmakers overwhelmingly supported corporate welfare

The Snyder administration’s final actions included the approval of new business subsidies. A last-minute spending bill allocated an extra $20 million to the Michigan Business Development Program and the Michigan Community Revitalization Program, both of which give grants or loans of state tax revenue to businesses. Lawmakers also approved a new rural speculation fund. And they authorized a further $300 million to the 21st Century Jobs Fund, which spends tax money on economic development.

We maintain a scorecard that tallies the business subsidies authorized by every Michigan legislator going back to 2001. Only the $300 million authorization fits our criteria for adding it to the scorecard.

The extra $20 million in MBDP and MCRP spending was a small part of a supplemental budget bill that authorized $1.4 billion in expenditures. It is not included in the scorecard because the vote, which is largely on things other than the MBDP and MCRP, is a poor reflection of legislator interest in business subsidies. The bill passed 84-23 in the House and 34-4 in the Senate, with bipartisan support and opposition.

The new rural speculation fund creates a structure for additional business subsidies, but this vote doesn’t authorize officials to spend any money. Policymakers would have to appropriate money in the budget in order to grant new subsidies. The bill passed 30-8 in the Senate and 81-25 in the House, both with bipartisan support and opposition.

The 21st Century Jobs Fund bill devotes $300 million to economic development programs. This spending was set to expire in 2019, but the bill extends the annual $75 million payments for another four years. This is the second extension of the program. The previous one is on the scorecard, as is the creation of the program in 2005.

This money pays for various business subsidy programs as well as the state’s tourism advertising campaign. It may pay for other things in the future when lawmakers allocate the money in annual budgets.

The $300 million extension of this program passed 74-34 in the House and 33-3 in the Senate. There was bipartisan support and opposition in the House and only Republican dissent in the Senate.

The complete scorecard covering votes going back to 2001 is available at www.michiganvotes.org/subsidies, and the method used to compile it is available online.