NCPA - National Center for Policy Analysis


January 7, 2010

Studies have argued that state jobs programs are really political development programs used by term-limited legislators to advance their own political careerism by handing out special tax favors and subsidies to select corporate winners, all under the guise of economic development, says the Mackinac Center.

Consider Senate Bill 323, sponsored by state Sen. John Pappageorge (R-Troy):

  • The bill would authorize special tax favors for any major redevelopment project spending at least $50 million for construction on a parking garage of several levels where the developer promises at least 300 new and permanent jobs.
  • Only one such current project fits that description and it happens to be in the district of the politician who introduced the bill.
  • Specifically, the bill would authorize special tax favors for the developer who wants to convert the former Kmart Corp. headquarters in Troy.

Ironically, says Mackinac:

  • The law under which these particular favors would be granted is the Brownfield Redevelopment program, intended to help clean up and redevelop contaminated properties.
  • This site is haunted by the ghost of special favors past -- winners that turned out to be losers.
  • In this instance, a previous owner, Kmart, was the recipient of two separate tax break deals that rode upon another statutory favor-granting vehicle, the Michigan Economic Growth Authority.

All this special favor-granting is unfair to hard working business owners and other taxpayers who don't have friends in Lansing.  It obviously has not worked to fix Michigan's economy, and the potential for corruption is also clear.  It is time that residents stop letting politicians use economic development as an excuse to build their own careers as favor-grantors, says Mackinac.

Source Michael D. LaFaive, "Playing Favorites," Mackinac Center, December 17, 2009.

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