Legislature's Most Persistent Targeted-Incentives Booster to Run Hearings on Embezzler's Tax-Break Deal

In the wake of the news that the Michigan Economic Growth Authority awarded a $9 million tax break/subsidy deal to what appears to be a "shell company" created by a convicted embezzler, Sen. Jason Allen, R-Traverse City, has been assigned the task of managing Senate hearings on the vetting procedures used by MEGA and its parent agency, the Michigan Economic Development Corp.

Bills in the Senate dealing with targeted tax breaks and subsidies are referred to one of two committees. The more elaborate or novel ones generally go to the Committee on Commerce and Tourism chaired by Allen. Ones that primarily involve amendments to existing tax law usually are dealt with by the Committee on Finance, chaired by Sen. Nancy Cassis, R-Novi. Cassis is the Senate's most vocal critic of the "corporate welfare" regime that by default has become virtually the only response to Michigan's economic decline by the state's political class, including the Granholm administration.

In contrast, during his 11 years in the Legislature, Mr. Allen has become perhaps the most ardent promoter and defender of selective tax breaks and corporate welfare subsidies for particular firms and industries. He has necessarily worked very closely with the officials and bureaucrats who operate the various arms of a state "economic devolopment" empire that has grown rapidly over this period. Since 2001, Allen has introduced at least 60 bills in this category, many of them thinly disguised favors benefiting specific companies. Here are concise descriptions of a selection of these bills, from MichiganVotes.org:

2010 Senate Bill 1111 (Authorize "LEED" building tax breaks)
To authorize additional property tax breaks to recipients of certain "commercial redevelopment" tax breaks, if the building meets certain energy efficiency standards ("LEED-certified").

2010 Senate Bill 1080 (Create another targeted tax break program)
To revise the "renaissance zones" tax break law to accommodate the new type of targeted tax break authorizing entity proposed by Senate Bill 1083, "next Michigan development corporations."

2009 Senate Bill 742 (Revise brownfield tax break eligibility)
To expand the eligibility criteria that allow a local government to authorize tax breaks for firms located in a brownfield "economic opportunity zone."

2009 Senate Bill 697 (Extend "tool and die renaissance zones" tax breaks)
To exempt certain "tool and die renaissance zones" from the phase-out of the generous tax breaks that occurs during the last three years of a renaissance zone's eligibility.

2009 Senate Bill 620 (Earmark certain sales tax revenue to tourism industry promotion)
To earmark a portion of the state use tax collected from the sale of tourism-related goods and services to promotional subsidies for the tourism industry.

Complete list including 42 additional bill descriptions.
Note: Taking a few minutes to scan this is illuminating.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.