Whitmer claims credit for helping Michiganders, but her policies raise costs

Gov. Gretchen Whitmer posted on social media on Feb. 2 her concern that Michigan residents face higher costs. But many of her policies have imposed their own costs, experts say.

The governor wrote that Michiganders should be able to build a good life for themselves and their families. “That means keeping more of your hard-earned money, lowering costs on essentials, and ensuring opportunity isn't out of reach for anyone” the governor said.

“Perhaps she could be more concerned about what she can do about actual price increases that Michigan families are already facing,” said Theodore Bolema, senior editor at the Mercatus Center, in an email to Michigan Capitol Confidential.

Michigan has the highest electricity in the region, according to Bolema, who is a member of the Board of Scholars at the Mackinac Center for Public Policy.

“These high electricity costs are hurting families right now,” Bolema wrote.

Energy prices are not the only concern of Bolema. He wrote in a blog post on Nov. 24 that the governor reinstated the prevailing wage, which will drive up construction costs for taxpayer-funded government projects.

One of Whitmer’s first efforts as governor was to call for a 45-cent gasoline tax hike to fix the roads. While she said there was not enough money in the budget to repair the roads, she also approved $4.6 billion in corporate welfare during the Democrats’ 2023-24 trifecta.

Since 2001, Whitmer has supported over $16 billion in corporate subsidies.

A recent report by James Hohman, fiscal policy director at the Mackinac Center for Public Policy, concludes that corporate subsidies are a waste of taxpayer money with a 91% failure rate.

Whitmer’s 45-cent tax hike would cost 22,500 private sector jobs, according to Mackinac Center calculations, and it would raise just under $2.5 billion in 2022, or approximately $2 billion less than the corporate welfare she approved during the past two years.

Whitmer has also tried to shut down Line 5, a petroleum pipeline that runs underneath the Straits of Mackinac. Closing the pipeline will likely make energy costs go up. Residents of the Upper Peninsula would feel the effects the most, as they get 65% of their propane from the pipeline.

The governor has also fought attempts to reduce what was supposed to be a temporary increase in the state income tax, vetoing a 2022 bill to cut the tax.

Retaining the higher rate has consequences, an economist told CapCon. “Looking into the future, we are becoming less and less competitive,” said Donald Alexander, professor of economics at Western Michigan University and a member of the Board of Scholars at the Mackinac Center, in a phone interview with CapCon.

“The state’s income tax is one of the metrics used to compare to other states and we wonder why things aren’t gung-ho here,” Alexander added.

Rep. Joseph Aragona, R-Clinton Township, chair of the House Regulatory Reform Committee, criticized the governor’s economic policies. “Here in Michigan the state squandered a $9 billion surplus on swimming pools, electric bicycles, and pet projects. That’s why your personal savings have less buying power, and groceries cost more. If the governor cares about helping people with high prices, she should work with Republican lawmakers to cut wasteful state spending so that we can reduce taxes.”