Legislators Propose More Corporate Welfare

Does Michigan really need more unelected government entities with the power to hand out corporate welfare? The backers of Senate Bill 1301 seem to think so. The bill would expand the power of government “port authorities” to borrow and engage in “economic development” activities. It is sponsored or cosponsored by Republican Sens. Mike Kowall, Tom Casperson (who chairs the Transportation committee), Mike Nofs, Patrick Colbeck and Mike Green, and Democrat Virgil Smith. (If there is any area where bipartisanship truly shines in the Michigan Legislature, it’s corporate welfare, expansions of which are routinely passed with barely a handful of “no” votes.)

Of course “economic development” is code for politicians and bureaucrats picking economic winners and losers by selectively doling out cash subsidies, tax breaks and sweet loan deals to a favored few developers and corporations with right political connections. That’s just what the political appointees on port authority boards would be allowed to do under this bill.

Apparently, the chairman and members of the Senate Transportation Committee are also open to more corporate welfare, since this week they held a hearing on the legislation. The bill would also vastly expand the powers and perks of port authorities in many other ways, in particular the one in Detroit, whose executive director is a former legislator himself and was on hand to testify about what a fine bill he believes this to be.

A second bill in this package would create a “Michigan Port Authority” that, according to Michiganvotes.org, would be “empowered to borrow-and-spend for practically anything the political appointees on its governing board choose if they assert it would ‘enhance . . . transportation, economic development, housing, recreation, education, governmental operations, culture, or research.’”

Increasing the number and powers of “port authorities” is part of a trend in this state to create ever more — and more powerful — government entities that are not subject to democratic accountability and are nearly impossible to unwind once established. Mackinac Center Education Policy Analyst Audrey Spalding recently wrote about the abuses of one type of such entities, a relatively new one called “land bank” authorities. Fiscal Policy Director Michael LaFaive has written about another proposed tax-borrow-and-spend entity being strongly advanced by Kent County interests, a so called “neighborhood enhancement” authority.

A long-existing version of these called the “Michigan State Housing and Development Authority” has also been in the news recently for a corruption scandal, and the Legislature just increased the amount this state version of the federal “Fannie Mae” home loan subsidy program can borrow by more than $1 billion dollars.

In addition to “authorities,” state and local governments have created almost 1,000 so-called “interlocal agreements” to do all kinds of things, sometimes highly controversial ones that would not happen if subjected to democratic accountability (such as the stealth unionization of home-based caregivers, or the construction of a second Detroit River bridge).

One thing all these under-the-radar expansions of government have in common is that they provide just the right kind of future job opportunities for the term-limited political careerists who dominate our Legislature (at least the ones who don’t rock the boat or ask too many questions). Specifically, positions that allow them to live comfortably after leaving office, still feel like an important person, and most of all, escape the “hard” accountability of a real private-sector job for the rest of their working lives.

Port authorities doling out corporate welfare will serve the politicians well in this regard, not to mention making their developer friends happy. Whether they serve voters, taxpayers, the rule of law, economic freedom and vitality is another question that deserves far greater scrutiny.

See also:

Detroit: Privatization’s Port of Call 

‘Love Boat?’

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