Politically Powerful Special Interest Gets Special State Tax Break

At its monthly board meeting today, the Michigan Economic Growth Authority voted to give a state business tax credit worth $2 million over five years to the corporate subsidiary of the Service Employees International Union for an operation that will provide administrative services for the SEIU and other local unions. MEGA is considered the "flagship" of the state's growing empire of "economic development" programs and authorities.

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The MEGA board's action was included in a press release posted on the website of the Michigan Economic Development Corp., which says the union will invest $3 million in this entity, to be located in Wayne County's Redford Township, and was given the selective tax break "to help convince the company to expand in Michigan over competing sites in Missouri and Florida."

The press release explains that the purpose of this union arm is "to provide administrative services for ... local labor organizations" (which probably means labor union locals around the country). It does not explain why the board considered the union's "competing locations" threat to be credible given that one is in a "Right to Work" state, rather than the kind of gamesmanship common when governments play the "picking winners and losers" game. Nor did it explain whether the tax break is merely a political payoff to one of the state's most politically powerful special interests — a union representing many government employees.

Supposedly, this union operation will create "322 new jobs, including 224 directly by the company ... (and) an additional 108 indirect jobs," according to the MEDC.

It is certainly just a coincidence that the new union operation will be located in (or immediately adjacent to) the district represented by the speaker of the Michigan House. (Redford Township is also expected to give a property tax break to the union entity.)  It is also certainly a coincidence that the recipient of this discriminatory tax break is considered a leading sponsor of the Association of Community Organizations for Reform Now (ACORN), and that the union and ACORN are deeply engaged in political campaign-related activities in Michigan.


H/T — James Hohman, for quickly spotting the item soon after the press release was posted.