Tuesday, October 18, 2016

Potential Corporate Welfare Binge Risks Second Michigan ‘Lost Decade’

Potential Corporate Welfare Binge Risks Second Michigan ‘Lost Decade’ [Michigan Capitol Confidential]:
"During Michigan’s economic “Lost Decade” of the 2000s, state government seemed to have just one response for crushing income and employment declines that cost some 800,000 residents their jobs between 2000 and 2010: more corporate welfare.
If there was any evidence this approach works to turn around an ailing economy — there is not — it still could not have overcome the massive drag imposed on the Michigan economy by business and income tax increases enacted in 2007, and smaller exactions like a 2004 property tax hike.
...But corporate welfare is always an attraction for politicians.
Image result for corporate welfareToday, in the absence of any overarching growth agenda, lawmakers on both sides of the aisle are falling back into past bad habits.
Indeed, the upcoming lame duck legislative session could see a corporate welfare blowout.
To protect his legacy of growth and reform, Gov. Snyder should be prepared to wield a sharp veto pen.
One bipartisan proposal could deliver potential taxpayer subsidies to Dan Gilbert of Quicken Loans and other downtown developers.
Fiscal analysts can't yet estimate the costs. Snyder has raised some concerns but not taken a public position on the idea.
Another bill from Rep. Holly Hughes (R-Manistee) proposing a new kind a port authority is being pitched with various “economic development” rationalizations. 
The measure passed the House in a bipartisan vote on September 22.
It could deliver port revenue to politically well-connected developers while leaving taxpayers holding the bag if things go badly.
The owners of two privately owned port facilities in Muskegon are not amused at the prospect of competition from their own local government.
One of them said in press reports that he and the other operator can easily handle any new demand for shipping cargo into Muskegon and adding another player would be counterproductive, and unfair too.
Hughes has struggled to justify how this legislation is a net plus for her region or the state. 
When pressed in a WJR radio interview, she told host Frank Beckmann to call someone else for details.
...Today, in addition to Hughes's legislation and the Gilbert proposal, there’s also a “public-private partnership” bill introduced by Sen. Mike Kowall.
Like the port proposal this also could become a vehicle for delivering private profits for well-connected developers while taxpayers cover the losses..."

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