The state of Michigan is subsidizing the costs of operating a Wisconsin-based ferry boat to compete with its Michigan-based rival.
Last year voters approved a $675 million bond proposal that was championed as an environmental protection bill. According to The Detroit News, roughly half this money has been earmarked for environmental clean-up. The rest is being distributed for such items as parks and recreation improvements, a community center, and a handful of studies. One expenditure provides us with a case study in how not to involve the private sector in environmental protection.
From its bond proceeds the state issued a $650,000 grant to a Wisconsin-based firm, HydroLink, Inc. for development of a cross-lake ferry dock. This is no ordinary pork-barrel project. HydroLink will use taxpayer subsidies to compete head-to-head with the unsubsidized, Michigan-based, private firm, Lake Michigan Carferry.
The idea of the state jump-starting a business is bad enough. But to do so in competition with a taxpaying private firm that pays its own way reeks of cronyism and harks back to Michigan's early days as a state. In the late 1830s and 1840s, state government was heavily involved in deciding which companies should build and/or maintain railroads, canals, and other enterprises. This ideathat government can successfully predict economic winners and loserswas a financial disaster. Now, history is repeating itself: State bureaucrats believe they can pick winners and losers in the economy by handing out favors to one business, while ignoring others.
In this case, here's what the bureaucrats failed to note: The Wisconsin business that will benefit from this $650,000 subsidy from Michigan taxpayers is up to his eyeballs in back taxes, bad debts and bankruptcies and has never run a ferry service before.
This case is typical of what happens when government bureaucrats try to take the reins of free enterprise into their inexperienced hands. It is high time for the Michigan legislature and the general public to privatize economic growth. Spending public money in ways that compete against tax-paying, unsubsidized Michigan companies is not "economic development." It is economic nonsense.
Michigan taxpayers and environmentalists deserve better.