Bipartisan Votes Send New $1 Billion Corporate Welfare Program To Michigan Governor

Bipartisan majorities in the Michigan House and Senate voted this week to authorize up to $1 billion in spending on a new corporate subsidy scheme. This appears to be the largest single appropriation for corporate welfare ever authorized in this state.

After flowing through a new Strategic Outreach and Attraction Reserve Fund (Senate Bill 769), the money will pay for a Critical Industry Fund (Senate Bill 771) that will give grants and loans to certain companies to create jobs or job training activities. Money will also go to a Strategic Site Readiness Fund (House Bill 5603), which will benefit certain companies, in the name of creating investment-ready sites for new manufacturing plants and facilities.

Passed on the same day was Senate Bill 85, which authorizes the state to deposit $1 billion into a new account that the programs will draw from.

A handful of lawmakers on both sides of the aisle blasted the scheme. Sen. Jeff Irwin, a Democrat from Ann Arbor, said in a Senate Journal statement, “I’m disappointed that we’re here trying to bribe companies to come to Michigan rather than investing and making Michigan the best state to be in.”

Sen. Tom Barrett, a Republican from Potterville, explained his opposition in a journal statement that included these comments:

“I don’t vote this way because I’m stubborn … rather it is because if these programs worked, they would have already proven themselves effective by now. Instead, we all bemoan the programs created by generations of legislators who preceded us because it strips resources out of our budgets that we could use to fund priorities in the future. Then we get persuaded by powerful interests and influences in our state to create new programs where we convince ourselves that we are wiser and smarter than the legislators before us and that our incentive programs will work better than their corporate welfare programs did. ...”

“Aside from that, how is it morally fair to collect taxes from the thousands of businesses paying into the state treasury, only to pay that same money out to larger businesses or even others that may be in fact a direct competitor to an existing business in our state?”