Michigan has it backwards. Our state government spends $300 million annually on corporate welfare, or as those in government prefer to call it, “economic development,” then it debates how to pay for fixing the roads.

It should be the other way around.

Fix the roads first and then have a debate over whether government should be engaged in “economic development.”

Keeping our roads in good repair is a core governmental function. Using public dollars to bet on which companies might succeed or as bribery to entice them to come to Michigan isn’t. What’s more, when it comes to economic development, government’s batting average is abysmal. That’s not surprising considering that the investments (or bets) are made by politicians with money that belongs to other people (the public).

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Year in and year out, over the past decade, state officials and the coalition pushing for more road and bridge money have fallen back on tax or fee increases as their recommended method of getting the funds. Year in and year out, voters send the message to politicians that another way of doing it should be found. The very predictable result of this circular process is that nothing gets accomplished and our roads continue to deteriorate.

This year, House Republicans are starting out on a more promising note. They’ve introduced a plan that would use existing resources to come up with an annual $500 million funding stream for roads. That is about a third of way toward the $1.5 billion that officials say is needed. If the $300 million that the state spends annually on corporate welfare was added to the mix, that would bring the new road funding dollars up to $800 million, more than halfway toward the goal.

Funding for the Michigan Economic Development Corp., which is the state’s corporate welfare arm, comes primarily from what Indian casinos send to the state. Wouldn’t it make more sense to earmark those funds, or at least the bulk of them, for roads?

Arguably, support for corporate welfare is the most common violation of conservatism committed by politicians who get elected to office claiming to be conservatives. Conservatism is rooted in the idea of trusting the common sense of individuals. An extension of this is trusting in the free market in matters of economics.

However, with corporate welfare being disguised as “economic development,” government officials basically are telling tax payers that they are the only ones clever and wise enough to anticipate future needs. But in doing so, they gamble with the public’s money.

Another way they could say this — but would never dare — is that they don’t trust individuals and the free market to come up with the right solutions. That’s why governmental economic development is the opposite of conservatism.

History shows that most successful inventions and innovations come about when someone takes a different or unconventional approach to a problem. By its very nature, government always sinks tax dollars into projects that are geared toward the latest popularly accepted and politically acceptable approaches. It is a herd mentality that is rarely clever or wise.

Beyond this is the reality that when government spends public dollars the process becomes politicized. It’s not the best projects that get the money; it’s the projects promoted by those who wield the most influence over politicians that get the loot.

Michigan’s current road funding woes offer an opportunity for our leaders to show what their priorities really are. Trying to address the road funding issue while leaving corporate welfare spending intact would place the interests and egos of politicians ahead of the state’s transportation needs, and do so at the expense of residents’ tax dollars.


(Editor’s Note: Jack Spencer is Capitol Affairs Specialist for Michigan Capitol Confidential. He is a veteran Lansing-based journalist. His columns do not necessarily represent viewpoints of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)