The political class in Lansing has a propensity to spend every dime they have access to as well as raiding dedicated funds. The latest effort to tap into state trust funds for the purpose of economic development is House Bill 5168. This bill would allow the Legislature to appropriate up to 5 percent of the Michigan Natural Resource Trust Fund, State Parks Endowment Fund or the Michigan Game and Fish Protection Fund for economic development subsidies that financial institutions have deemed too risky to loan money.
HB 5168 epitomizes government gone amuck. Trust funds are set up for dedicating money for specific purposes; when legislators propose to divert those funds for unrelated purposes they are violating the public trust. That is not to say that legislative review and proposed changes to trust funds are not appropriate, but those changes should be openly debated and relate to the original purpose of the trust fund. For example, it might make sense to make changes that would allow more Natural Resource Trust Fund money to be spent on managing and protecting natural resources as opposed to buying more state land. Altering natural resource-related trust funds for economic development hardly qualifies as having any nexus to the purpose for which the funds were established in the first place.
Even if raiding trust funds for unrelated purposes could be justified, state legislators playing the role of venture capitalist is a bad idea. It seems to be an absurd proposition that the political class knows better than financial institutions regarding investment decisions. Of course, it is always easier to spend someone else’s money, particularly when there are few ramifications for bad decisions. The politicians who attend groundbreaking ceremonies, financed by taxpayer money, are seldom seen later at the bankruptcy proceedings when things did not work out the way those politicians envisioned.