Taxpayers Deserve to Know Details of Business Subsidy Deals

State officials are hiding what should be public information

Businesses that inked special deals with the state are going to collect $681 million from taxpayers this year. But residents cannot be told which businesses are cashing in and how much each gets. This is a failure of basic government transparency.

As a citizen, you are entitled to know how your government is spending your money. The state and local governments put a lot of effort into this — for instance, posting every annual financial report of every government and every contract the state agrees to.

And, with few exceptions, people can access any government document available with a Freedom of Information Act request. That includes detailed records of spending by governments, even checkbook registers and credit card statements. A simple FOIA request is all that is needed, for instance, to find out how much your school district spends on paper clips.

All of this shows how abnormal it is that the state does not disclose the recipients of a large number of business subsidy programs. Some of this information is available: There’s a report on the recipients of certain programs here, but not all of them. The subsidies that are delivered through tax credit programs are deemed to be confidential information.

They shouldn’t be. These deals allow select companies to collect dollars — in the form of refundable tax credits — from other taxpayers and have contracts with the state that determine the size of the subsidy. These are subsidies administered through the tax code.

There are some obvious reasons why this information should be public. Economists can use it to determine the full costs and benefits of the program. It can be used to compare the alleged benefits of this spending to that of other state programs or government services. And it can be used to hold politicians accountable.

But there is a more important reason: Citizens should be entitled to it. This is their money that is being spent and they deserve to know who is getting it and what they are getting in return.

Thankfully, some lawmakers also think that the public has a right to know where all their taxpayer dollars are going. Rep. John Reilly, R-Oakland Township, introduced bills that would allow this information to be disclosed. It’s a simple bill that would clarify that payments through these programs are disclosable.

And that’s the kind of thing that both Republicans and Democrats should support. It’s bad enough that subsidy programs put select businesses ahead of the taxpaying public and businesses that don’t find favor with politicians. These groups ought not have to foot these bills under a veil of secrecy.

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.