Former state lawmaker urges Michigan to curb corporate subsidies, cites Foxconn, MEDC transparency concerns

Steve Johnson, a former state representative and a fellow at the Center for Practical Federalism, told the Michigan House Oversight Subcommittee on Corporate Subsidies and State Investments on Sept. 17 that the state should sharply restrict corporate subsidies and improve oversight of programs such as those administered through the Michigan Economic Development Corporation (MEDC).

Johnson told the committee that corporate subsidies pose moral and practical problems. “Corporate subsidies at its very core is you’re taking some money that isn’t yours,” he said, adding that the practice often amounts to “stealing from Peter to pay Paul.” He said most headline-grabbing subsidy deals do not produce the jobs promised, pointing to a Mackinac Center analysis that found roughly 9% of announced projects delivered the advertised outcomes.

The testimony centered on three arguments Johnson said justify limiting subsidies: the morality of redistributing taxpayer dollars to large private firms, the poor record of subsidy programs in producing net new jobs, and constitutional limits on appropriating public money for private purposes. Reading language from the Michigan Constitution, he cited Article IV, Section 30: “the assent of two thirds of the…