Taxpayers Deserve to Know Details of Business Subsidy Deals

State officials are hiding what should be public information

By James M. Hohman | October 5, 2017

Businesses that inked special deals with the state are going to collect $681 million from taxpayers this year. But residents cannot be told which businesses are cashing in and how much each gets. This is a failure of basic government transparency.

As a citizen, you are entitled to know how your government is spending your money. The state and local governments put a lot of effort into this — for instance, posting every annual financial report of every government and every contract the state agrees to.

And, with few exceptions, people can access any government document available with a Freedom of Information Act request. That includes detailed records of spending by governments, even checkbook registers and credit card statements. A simple FOIA request is all that is needed, for instance, to find out how much your school district spends on paper clips.

All of this shows how abnormal it is that the state does not disclose the recipients of a large number of business subsidy programs. Some of this information is available: There’s a report on the recipients of certain programs here, but not all of them. The subsidies that are delivered through tax credit programs are deemed to be confidential information.

They shouldn’t be. These deals allow select companies to collect dollars — in the form of refundable tax credits — from other taxpayers and have contracts with the state that determine the size of the subsidy. These are subsidies administered through the tax code.

There are some obvious reasons why this information should be public. Economists can use it to determine the full costs and benefits of the program. It can be used to compare the alleged benefits of this spending to that of other state programs or government services. And it can be used to hold politicians accountable.

But there is a more important reason: Citizens should be entitled to it. This is their money that is being spent and they deserve to know who is getting it and what they are getting in return.

Thankfully, some lawmakers also think that the public has a right to know where all their taxpayer dollars are going. Rep. John Reilly, R-Oakland Township, introduced bills that would allow this information to be disclosed. It’s a simple bill that would clarify that payments through these programs are disclosable.

And that’s the kind of thing that both Republicans and Democrats should support. It’s bad enough that subsidy programs put select businesses ahead of the taxpaying public and businesses that don’t find favor with politicians. These groups ought not have to foot these bills under a veil of secrecy.

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.

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University of Michigan Violates Open Records Law

It took a lawsuit to obtain public information

By Tom Gantert | October 4, 2017

The University of Michigan withheld emails in violation of the Freedom of Information Act by claiming they were protected conversation under law but none of those emails met that standard. The withheld emails involved comments University of Michigan President Mark Schlissel made about President Donald Trump and were eventually released after a settlement of a lawsuit.

U-M withheld seven emails and claimed that they were protected from disclosure under the FOIA law. It cited a provision that allows public entities to withhold documents that are “of an advisory nature that cover purely factual materials and are preliminary to a final agency determination of policy or action.”

The Mackinac Center for Public Policy sued U-M over seven contested emails and in a settlement the university released the emails.

The emails do not contain anything that would be considered part of any “determination of policy or action.” They do contain comments made by Schlissel to colleagues that are highly critical of Trump.

“If we didn’t sue them, we would have never gotten these documents,” said Patrick Wright, director of the Mackinac Center Legal Foundation.

Rick Fitzgerald, spokesman for the University of Michigan, referred to a statement the university made in the settlement.

It read: “The University denies any wrongdoing and states that in January of 2017, while in the course of processing the request at issue, the University of Michigan received and logged the highest number of FOIA requests ever in a single month in the University’s history.”

The statement continued: “The response period also included personnel absences in the University’s FOIA office due to illness, the University’s December break, and nine business days between the final invoice and payment by the Mackinac Center.”

The university said it would create two new staff positions dedicated to FOIA management and response.

Michigan Capitol Confidential filed the FOIA on Nov. 16, 2016. U-M responded on Dec. 12 and the Mackinac Center made the requested good-faith deposit on Dec. 15. The Mackinac Center’s check was deposited by U-M on Dec. 20. The FOIA documents were not sent to the Mackinac Center until March 1.

Michigan Capitol Confidential filed the FOIA to get any emails from President Schlissel mentioning President Donald Trump because Schlissel has been highly critical of Trump in the media. The day after the election, Schlissel addressed a student protest, saying 90 percent of the students had not voted for Trump. He commended them for rejecting “the kind of hate and the fractiousness” he had seen in the campaign season.