News Story

The Michigan Politicians Who Approved $6 Billion In Business Subsidies

New scorecard shows which legislators voted for how much

Democratic and Republican lawmakers have approved handing out $16 billion in cash subsidies to businesses since 2001, $6 billion of which is included on a voting record scorecard attached to a new analysis by the Mackinac Center for Public Policy.

The Mackinac Center tally includes 37 roll-call votes in both the state House and state Senate, going back to 2001. These were on measures that directed the Michigan Economic Development Corporation to give out taxpayer-funded subsidies to a relatively small number of select businesses and industries.

The bills scored by the Mackinac Center show the amount of subsidies that lawmakers authorized, not all of which were necessarily collected. Many subsidy deals signed with individual companies never came to fruition, and the money was never paid by the state.

The analysis did not include selective tax breaks, such as property tax abatements, that don’t result in government writing checks to beneficiaries. The $16 billion in cash outlays it did score was spread among 71 laws approved by legislators and the governor.

For various reasons, not all of these measures could be included in the voting record scorecard created for the analysis. Some were part of a much larger measure, such as an omnibus state budget bill, or tacked onto a major business tax overhaul. But House and Senate votes for 37 new laws authorizing $6 billion in subsidies were included in the legislator scorecard.

The analysis shows that state-supported corporate welfare is a bipartisan activity. The average Republican approved $1.47 billion in business subsidies while the average Democrat approved $1.62 billion worth.

Over 17 years, there were 22 lawmakers who voted against every business subsidy approved while they served. In total, the voting records of 498 Michigan legislators were scored, which is all of those who have held office since 2001. Missed votes by individual lawmakers were not included.

There were 217 legislators since 2001 who scored 100 percent in approving all of the scorecard’s business subsidy authorizations that came before them during their terms.

Beau LaFave is a first-term Republican state representative from the Upper Peninsula community of Iron Mountain. He has voted “yes” on the three subsidy authorizations that have come before him since he entered office in January 2017. LaFave said the state should be cutting taxes and regulations across all sectors of Michigan government and make it easier for businesses to operate.

“Generally, I’m not a fan of picking winners and losers,” LaFave said.

However, LaFave compared selective business incentives to nuclear weapons proliferation, saying he wished no states offered the incentives, but if the government in one state has the option to use them, so should the others.

“Since other states that border mine, like Wisconsin, are going to offer sweetheart deals, we have to be competitive as well,” LaFave said. “So if you are talking 1,000 jobs downstate or a couple 100 jobs in the U.P., I’d be interesting in making that possible.”

Correction: LaFave voted yes on the three subsidy authorizations since 2017.

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.