Commentary

Michigan Lawmakers Approve $1 Billion in New Corporate Subsidies

Their votes can be seen and tracked on a business subsidy scorecard

On their last day of voting on bills in 2021, members of the Michigan House and Senate approved $1 billion in new spending on selective, taxpayer-funded handouts to certain corporations. Their votes have been added to a business subsidy scorecard that has recorded individual lawmakers's votes on such handouts, going back to 2001.

Lawmakers often get pressured to spend taxpayer dollars on business subsidy programs even though these have been demonstrated to be ineffective at growing employment, unfair to companies that don’t recieve the same privilege, and expensive for taxpayers. But the lure of tantalizing headlines about business expansion has proved just too tempting for most politicians.

Reportedly, lawmakers were driven to this vote by headlines about Ford Motor Co.’s decision to build electric vehicle plants in Kentucky and Tennessee. After that announcement, some legislators here were also being approached by a small number of unnamed business executives who suggested subsidies would be needed to get them to locate facilities in this state. These elected officials aren’t saying who told them this, and some have even signed non-disclosure agreements that prohibit sharing any details.

It’s a contrast to the past three years, during which senators and representatives in the Michigan Legislature have rejected calls to authorize additional corporate subsidy programs. A comparatively modest $261 million in new corporate handouts have been approved by state legislators during the Whitmer administration, compared to $2.5 billion during Gov. Rick Snyder’s two terms. Over the past 20 years, lawmakers have approved $17.6 billion in business subsidies.

The latest $1 billion subsidy votes in the state House and Senate were bipartisan on both the “Yea” and “Nay” sides. The roll call votes have been added to the business subsidy scorecard, which shows how much lawmakers have approved, and who was on either side of each vote. See the results here.

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.

News Bite

State’s Data Show Masks In Schools Don’t Work, Tells Kids To Wear Them Anyway

Age 5-18 COVID transmission rates almost the same regardless of school mask rules

Masks do not appear to prevent the transmission of COVID-19 among school-aged children, according to new data released by the Michigan Department of Health and Human Services. The state health department says students should still wear a mask regardless.

Transmission rates among school-age children are, in the words of the report, “washed out” or “have become more similar.” That is, transmission rates were nearly the same, regardless of whether schools in a given community imposed mask mandates. The most recent data even shows that communities where schools had few or no mask rules experienced lower transmission rates among school-age children.

The state nevertheless concludes, “It remains important to mask up in indoor settings (schools and otherwise) to prevent transmission.”

The similar school transmission rate pattern appeared in November, according to the state health department. It had stopped reporting these statistics for several weeks, so it was unknown if masks in schools had been ineffective before the current report. The Mackinac Center for Public Policy sent a Freedom of Information Act to the Michigan Department of Health and Human Services requesting the school transmission rate information that was no longer being published.

The state health department says the fact that there are similar rates of transmission, regardless of masking requirements, is most likely due to community transmission outside of school. Even though the data suggests that masks do not stop transmission in schools, the department still presses officials to require them.

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.

News Story

Amid Ongoing Mismanagement, Flint Schools Get $51,000 Per Student From Feds

District pins (latest) audit problems on staff turnover

Flint Community Schools is scheduled to receive $160 million in federal COVID-19 relief money. This $51,215 per-pupil injection of federal money is by far the most received by any school district in the state.

But an audit of the district’s latest annual financial report extends an ongoing record of financial mismanagement that should raise red flags about its capacity to responsibly manage the federal COVID money.

The district’s most recent comprehensive annual financial report, or CAFR, covers the fiscal year ending in June 2021.

As in previous years, auditor’s notes on the CAFR expose some persistent problems:

Several account balances in the school district’s accounts and records were improperly recorded according to its accounting firm.

The budgeting mistakes that were caused by “unplanned vacancies and turnover in the business office” were “fixed by management,” the report explains.

The corrections made during the audit “impacted expenditures, revenue, assets, and liabilities within the School District’s governmental funds and government-wide financial statements and also impacted the schedule of expenditures of federal awards.”

“The School District did not have sufficient resources available to adequately review and adjust account balances or to proper account reconciliations and schedules during the closing process. As a result, several account balances were not independently reviewed and adjusted prior to the commencement of audit procedures. In addition, the schedule of expenditures of federal awards was not prepared or reconciled to the accounting records.”

When asked about the issues, an official replied in a written response:

“At Flint Community Schools, we are committed to transparency and working alongside our community to determine the best use of funds.”

“The district recently hired a new accountant who started December 2021. This accountant is working closely with the district’s finance team—reviewing past expenditures from the beginning of the school year in July and filling in gaps that resulted from unplanned vacancies during the COVID-19 pandemic—and working directly with federal, state and local programs for all grants and budgeting expenditures. We invite community members interested in collaborating with the district to help determine the use of ESSER III funds to visit FlintSchools.org for a schedule of community forum meetings, which run through mid-December.”

The term “ESSER III fund” refers to one of the large amounts of federal dollars the district is receiving.

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.