Appropriations Summary

Actual[87]

Recommended

Savings

 

 

 

 

Interdepartmental Grants:

$200,000

0

$200,000

Federal Funds:

$403,583,100

0

$403,583,100

State General Fund/General Purpose:

$112,790,900

0

$112,790,900

Special Revenue Funds:

$13,210,600

0

$13,210,600

 

 

 

 

Gross Appropriation:

$529,784,600

0

$529,784,600

Previously an independent state agency, the Michigan Jobs Commission (MJC) was incorporated as a state department on February 28, 1995.

The mission statement of the MJC reads as follows: "The Michigan Jobs Commission works in partnership with local communities and existing businesses to retain and expand job opportunities and improve Michigan's overall business climate."[88] It attempts to attain this goal through the implementation of a wide variety of programs, many of which have recently been transferred to the MJC from the Departments of Labor and Commerce.

In addition to attaining Departmental status, the Michigan Jobs Commission has also increased a great deal in size over the past year. According to Governor John Engler, "In 1995, the Michigan Jobs Commission will significantly expand what is now recognized as one of the nation's most ambitious job creation strategies."[89] And indeed it has; the budget of the Michigan Jobs Commission for fiscal year 1995-1996 totals $529,784,600, an increase of over 50 percent from its 1994-1995 budget of $352,204,500.

General Recommendation

The 1,000-employee Michigan Jobs Commission is Michigan's department of corporate welfare, and a clear manifestation of political society. While Governor Engler has been a national leader in the reform of government assistance for the poor, he has presided over the growth of government assistance for profitable corporations. The existence of the Jobs Commission is based on several flawed premises and opportunistic political considerations such as:

·         It assumes that state bureaucrats can foster wealth and job creation better than individual consumers, workers, bankers, insurers, investors, and managers whose collective decisions form the market economy.

·         It assumes that the efforts of trade associations, industry groups, Chambers of Commerce, law and accounting firms, universities, and a host of specialty consultants are insufficient to provide businesses the expertise they need to grow and prosper in Michigan, and that state bureaucrats should supplement the services these organizations already provide.

·         It assumes that engaging in an economic "war between the states" through selective tax credits and subsidies for large corporations is a more effective economic development strategy than across-the-board tax relief.

·         It reflects the political fear that public officials will be seen as "doing nothing" to encourage economic development if they only remove barriers to the efficient operation of the free-market economy and refrain from state intervention.

The fact is that all the business support services provided by the Michigan Jobs Commission, if truly necessary, can be, and most often are already, provided by private sector firms. The subsidy programs are subject to political considerations, and there is no reason to believe that state bureaucrats can invest capital any better than private sector financial institutions and Michigan companies themselves. Michigan does not need a government-directed industrial policy; it needs leadership that understands and respects the operation of a free-market economy.

It is therefore recommended that the Michigan Jobs Commission be eliminated entirely. While this will mean forgoing significant federal dollars, it will free significant state resources--over $110 million--to be returned to Michigan citizens and businesses. Instead of focusing on expanding so-called "pro-business" programs, the Governor and Legislature should recognize the institutions of civil society that generated tremendous wealth in Michigan long before that advent of pervasive government intervention. What follows is a description of various Jobs Commission programs and their associated costs.