Michigan has a number of selective business subsidy programs, none of which are required to improve Michigan’s economy. They are economic development programs unaccountable to economic development.
Worse, the state operates a program that gives out unlimited amounts of cash to whatever company lawmakers choose.
This is not the kind of thing that the state ought to duplicate. Yet, under the proposed Michigan 360 program, lawmakers would add a new, unaccountable development program authorized to give out money to unspecified recipients. It would expand economic development program eligibility to nonprofits and governments, and without any expectation that they’d use taxpayer cash to create jobs.
The program would require that, for every dollar in subsidies awarded by the state’s big corporate handout program, another twenty cents or more be spent on local projects. The list of acceptable local projects is broad. Main street projects, job training, “placemaking,” childcare, housing, community services, broadband and other spending items are eligible.
Would that mean member-exclusive nonprofits like the YMCA can get money to build member-exclusive buildings? Sure. The program does not require sponsored projects to be open to the public.
It could also fund union training facilities that get used for union political activity. The proposal has an expansive list of uses and nothing that would prohibit payment of taxpayer funds for organizations that also engage in politics.
Politicians could build giant statues of themselves with Michigan 360 money if they wanted.
In other words, the bill requires corporate handouts that will create extra pork projects. The budget already contains a lot of pork. There were over 400 different projects to particular legislative districts that cost $1.8 billion of taxpayer money — much of which could easily fall into the eligibility guidelines for the Michigan 360 program.
Essentially, it means that every dollar given to selected companies requires at least 20 cents to go into a slush fund that will go to whatever lawmakers want. That’s a weird way to encourage economic development.
Perhaps some of these projects would be considered are worthwhile uses of taxpayer dollars. If so, they are worthwhile whether or not the state writes big checks to big companies. If they’re not worthwhile, they are wasteful spending, and writing big checks to big companies only adds to the waste.
Proponents say Michigan 360 ensures that someone else benefits when the state makes business subsidy deals.
“This is an entirely new approach to how we view economic development here in the state of Michigan, focusing on the quality and livelihood it will bring to Michigan families, workers and their communities,” said Sen. Mary Cavanagh (D-Redford Twp). There are only the loosest standards for who would get money, and the bill requires no outcomes from recipients. It would be an entirely new approach to economic development, but not one that lawmakers ought to try.
Handing out big checks to big companies in exchange for jobs is an ineffective approach to economic growth. It’s unfair to other businesses and expensive to the state taxpayer. Requiring that an extra 20% go to someone else — for projects of questionable economic development merit — would only make the state’s policy worse.
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