Mark Schauer's Support for Corporate Welfare

He had lots of help from the GOP along the way

Mark Schauer, Democratic candidate for governor, is railing against tax breaks for businesses.

In a recent ad Schauer alleges that Gov. Rick Snyder cut education spending and used the revenue "to give tax breaks to businesses even if they send jobs overseas." Schauer's spokesperson, Zack Pohl, reiterated the claim in a recent Detroit Free Press article: "Snyder chose not to find new revenue for education because he used that money to pay for his huge $1.8 billion corporate tax break." The media has recently given more scrutiny to this narrative.

Yet over the past decade Schauer himself was one of the leading proponents of tax breaks for business — at least for particular firms selected by the political appointees on the board of the Michigan Economic Growth Authority. Ironically, it was Schauer's opponent — incumbent Gov. Snyder — who ended this tax break program, albeit replacing it with a smaller subsidy program.

There is an obvious difference here in economic development visions. The MEGA program offered politically well-connected firms special favors. Broad-based tax cuts for businesses take a more "fair field and no favors" approach to development.

In the audio posted below you can hear Schauer, then a state senator, back in 2003 expressing concern about a looming sunset of the MEGA targeted tax break program. (Politicians from both parties voted with near unanimous majorities voted to extend it.)

From its beginning and up to the point these 2003 hearings were held, MEGA had offered up to $1.5 billion in state tax breaks to businesses. These special deals often came with other state goodies and were contingent on local governments providing additional special treatment.

Two Mackinac Center for Public Policy studies found that MEGA failed to create the jobs it had promised. The first in 2005 found no new net jobs from the program, and the second found the program may have actually destroyed more manufacturing jobs than it created.

This wasn't the only corporate welfare program supported by Schauer — and he had lots of company on the Republican side of the aisle, too. See Schauer's record of voting on corporate welfare bills introduced and supported, including flat-out cash subsidies, at MichiganVotes.org.

Corporate welfare is a bipartisan bad habit. Politicians in glass houses shouldn't throw stones.