News Story

Senate Democrat Gets Chance To Oppose Corporate Subsidies, Takes It

Minority Leader Jim Ananich earlier blasted ‘a pot of money being held hostage by corporate accountants’

Senate Minority Leader Jim Ananich of Flint has called for terminating long term-corporate subsidy payments previous legislatures authorized back in the 2000s for a handful of big companies. Importantly, these were not just one-time subsidies, but agreements for the state to keep paying the companies up to 20 years for jobs they retain rather than eliminate.

Voting records show it’s not uncommon for Democrats who may criticize corporations and corporate subsidies in speeches and press releases to then vote “yes” when the subsidy authorizations come before the Legislature. That also applies to some Republicans who criticize subsidies.

Ananich recently had a chance to oppose keeping one subsidy program going, and he did so. He voted “no” on a bill that will generate about $12 million in taxpayer liabilities, according to a fiscal agency bill summary.

Ananich voted against House Bill 4189 on Sept. 17, which passed the Senate 31-6. If the House and governor go along, the bill will allow the successor to the Federal Mogul company to benefit from subsidies authorized years earlier. Ananich and four other Senate Democrats opposed the bill, plus just one Republican.

The tax credits authorized for Federal Mogul, and now being claimed by its successor Tenneco, were among the subsidies granted by the Michigan Economic Growth Authority in the 2000s. The terms of this long-term agreement had already been modified by previous legislatures several times to accommodate the company’s inability to meet requirements related to job retention and other criteria.

That is essentially what the bill Ananich opposed will do, except the subsidy recipient is the firm that acquired Federal Mogul, and the issue is complicated by some technical factors related to that acquisition.

“Michigan has no shortage of underfunded programs, whether it be K-12 schools, local public safety, or, most notably, the roads,” Ananich said in a Sept. 10 press release. “While we’re debating where we’re going to have to make painful cuts in the budget, our state is sitting on a pot of money being held hostage by corporate accountants looking for a taxpayer-funded windfall. For a decade, big corporations have received break after break, and it’s time for them to start paying their fair share.”

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.