The drama over corporate welfare has already begun to play out in Lansing.
Scene 1: Senator Mike Kowall files SB25, that expands corporate welfare and state government picking winners and losers.
Scene 2: Representative Dan Lauwers files HB4122, that would eliminate taxpayer-paid film subsidies to Hollywood millionaires and billionaires.
Subplot #1: Governor Snyder. Though he was the Michigan Economic Development Corporation's first president, after it was created by Governor Engler in the 90s, candidate Snyder in 2010 ran against the government picking winners and losers via corporate welfare. To his credit, he pushed for corporate welfare subsidies to go through the appropriations process, instead of the uncapped, unlimited "tax credit" scheme that Governor Granholm used. He's also reduced the amount of money going to these schemes, though the residual Granholm promises still haunt Lansing. Lansing, though, still gives out hundreds of millions of extra handouts every year.
Subplot #2: Democrats. There are enough Republicans in the House opposed to corporate welfare to at least stop increased handouts, IF the Dems would unite against them. That hasn't happened yet, though there does seem to be some rumblings that Dems may start opposing crony capitalism. Then-state rep Justin Amash and I would regularly team up with MEA Democrats in bashing corporate welfare in floor speeches. The MEA back then wanted to stop the outflow to the well-connected businesses in order to refocus the money on schools, while Rep. Amash and I just wanted to use that money to cut taxes. Here's to hoping the MEA ramps up their anti-corporate welfare bonafides (they even paid for a wonderful Anderson Economic Group study that showed the harm of corporate welfare schemes in 2009).
Back to Senator Kowall's bill - his SB25 is the first bill this session to EXPAND corporate welfare in Michigan. The thought behind SB25 appears to be that central planners in Lansing feel that existing medical service providers should be forced to subsidize their new competitors. Under his bill, taxes from businesses, including existing medical service providers, will be used to help build infrastructure for new medical providers.
During my first term in the House (2009-2010), Jennifer Granholm was governor and I remember she would often push the addition of a new industry - whatever the flavor of the month was - to add to the list getting subsidies. Somehow she claimed that by picking (narrowly) a few industries, it would help "diversify" the economy. Think about that. By taking money from all businesses (the ultimate diversity) and giving it narrowly to some, she claimed to diversify the economy.
I haven't heard whether Senator Kowall (with no co-sponsors for his bill) will claim his scheme will "diversify" the economy or if it's just a raw, "we choose you" kind of thing...but the fact is, those medical facilities that have been here for decades won't get this handout. Their competitors will. And it's likely that some projects will fail...yet, central planning appears to be a lot of fun for some. Watch for the old, "these projects will bring in thousands of jobs"…while forgetting that most projects would get done anyway and that the money needed to pay for the subsidies will come out of the pockets of businesspeople who would have created thousands of jobs if we just left it in their pockets. SB25 is actually up for a hearing today in the Senate Economic Development committee. Please consider emailing the chair and committee members and urging a stop to any increased corporate welfare, including SB25.
On the flip side...in the Michigan House, Rep. Dan Lauwers and eleven co-sponsors have introduced HB4122 that would end Hollywood subsidies with taxpayer money.
No subsidy sends more Michigan taxpayers' money out of the state than Hollywood film subsidies. And it goes to a bunch of millionaires and billionaires on the left coast.
With the main supporter and former senate majority leader, Randy Richardville, term-limited out, here's to hoping that Lansing stops this insanity. Defeating the sales tax hike should put this $50 million handout on the chopping block, when legislators actually start doing their job and work on finding money to fix the roads within the existing $52 billion budget. By the way, HB4122 went to the House Tax Policy committee, so please consider contacting Chairman Farrington (who recently called film subsidies, "nothing but a boondoggle") and urge him to take the bill up - I suspect there are enough votes to move it out of committee.
Footnote: There are other players in the drama - like Speaker Cotter, Speaker Pro-Tem Leonard and Majority Floor Leader Nesbitt -- all three of whom regularly voted with those of us opposing corporate welfare during the last two to four years.
Footnote 2: As this post went to press, Rep. Todd Courser announced that he had introduced a bill that would completely defund the MEDC. Something that may add to the drama, as I know there are quite a few legislators who would entertain this idea.