Michigan spends a quick $3B picking winners and losers

Corporate welfare is a big winner, early into Michigan’s 102nd Legislature. With just five bills signed into law, Michigan lawmakers have spent $2.9 billion of taxpayer money picking winners and losers, by way of cash giveaways and grants.

Senate Bill 7 represents the quickest billion dollars to be spent in Michigan history — $946 million, to be precise. The spending package includes $200 million for a paper mill in Escanaba that is not required to create a single new job.

The 2023 Public Acts Table for Michigan, last updated Feb. 15, only shows 3 laws.

Two more bills have passed since, and they await Gov. Gretchen Whitmer’s signature: House Bill 4001, which spends $1.65 billion on business subsidies for the Ford Marshall battery plant, and House Bill 4016, which spends $800 million on other business subsidies.

James Hohman, director of fiscal policy at the Mackinac Center, told CapCon that improving Michigan’s business climate, not creating targeted cash giveaways, is the path to job creation.

“Michigan’s economic recovery has stalled before the state got back all the jobs it lost during the pandemic. Half of all the states have fully recovered,” Hohman noted.

“The places that are up the most are states like Utah and Idaho, which don’t subsidize select companies with large taxpayer subsidies, but have better business climates than Michigan. Lawmakers ought to spend less time on ineffective subsidies and more time improving the state’s tax and regulatory system,” Hohman said.