Posted on 01/31/2012 12:04:22 PM PST by MichCapCon
According to The Detroit News, former Gov. Jennifer Granholm made a deal with a group of wealthy and politically connected individuals in Oakland County to use state pension funds to guarantee $18 million they borrowed to set up a film studio in Pontiac, essentially making the pension fund the “co-signer” on the loan.
The “business model” for this studio was completely dependent on another of Gov. Granholm’s corporate welfare schemes, a subsidy program that paid up to 42 percent of film producers’ Michigan expenses. No reputable economist has ever defended these subsidies, which are pure “political development” programs, not economic development ones.
Thankfully, last year the Legislature supported Gov. Rick Snyder’s recommendation to greatly scale back these unlimited subsidies, and instead appropriate “just” $25 million for the handouts. That is, we’ll still waste taxpayer dollars on them, but fewer taxpayer dollars.
But not surprisingly, a business model that depends entirely on wasting the full, unlimited amount every year will have problems should the handouts become limited.
And so it is: The project Gov. Granholm backed with state pension fund money is unable to pay its debt, which means in a few weeks the state employee pension fund will have to cough up $630,000 from money set aside to pay future benefits to retired employees. Unless Gov. Rick Snyder and the Legislature reverse course on scaling back the absurd film subsidies, taxpayers could get stuck repaying the balance of the $18 million loan.
The plot thickened when Senate Majority Leader Randy Richardville, who has been working to reverse the scaled back program, said the following to the Gongwer news service:
"A few years ago we told some Michigan investors that if they invest in an industry that we would back them. And we gave them parameters and now we've changed that. We sent several businesses away that would help recoup that investment.”
By “sent several businesses away,” he means taxpayers stopped picking up 42 percent of film producers’ expenses. In other words, Sen. Richardville is using this default to lobby the governor and his colleagues to give more loot to film producers, insinuating that the state is breaking a promise by choosing to give away less loot instead.
Sorry, Sen. Richardville, but it doesn’t work that way. The individuals who finagled a state pension fund guarantee from Gov. Granholm are big boys who understand that their “business model” was in fact a purely political bet, not a business one, and the risks involved are likewise political as well as financial.
And now their political bet is coming up a loser.
Well, too bad. Rule one: When a state is digging itself into a hole, it should stop digging. Preventing a loss on one dirty deal by pouring more money into another one is no way to run a state government.
She should go to jail for this theft.
Oh, I know - the political part of both the former governor and the State Senator!
Any bets between (R) and (D)?
simple math should apply... the canadian socialist feminazi former governator gambled with the pension fund and lost... so the 18 mil that the pension fund has to cough up should be prorated and everyone that gets a state pension will have their pensions reduced by that amount.... then, and only then, will the government be truly held accountable...
Granmole D Richardville R ino. We voted the rats out and this is the leadership we got. Time to vote this bunch out too.
Yeah Richardville needs to go too. He along with Jason Allen were the genesis of the bill that lead to forced unionization of babysitters.
Well, I’ll be blown away.
I disagree. If you want to hold those that made the deals accountable it should be Engler, Cherry, Grandmole and the others that were in elected positions that either voted for or created these incentives or appointed cronies to oversee those funds. This is just one of many that have taken place for years in both the State employee and public employee pension funds. The difference should come out of their pensions! Get ahold of the public records and see what those people are getting from State Pensions per month. It will make your head explode.
They were directly responsible for the waste of retiree funds for political gain. The prison guard, cafateria worker or bus mechanic that has his/her paycheck looted to cover the difference is not the culprit here.
So... are you saying that I??? with my tax dollars should suffer to make you whole???? If the people drawing the pensions could care less about what a socialist does with the money set aside to pay them, why the hell should I care??? The only people that have a reason to sue are the ones receiving the pensions. They do not sue because the costs are passed onto us that do not recieve luxurious state pensions. Let the people who have ALLOWED ( yes, if you do not bitch, you have given your consent ) these whores to gamble with YOUR future deal with it and pay the price for it... don’t you even DARE to ask me to make you whole...... I will quit my job, go on welfare, and make YOU and your pension pay for me.....socialistic POS.. ( not you, but the people with your mindset )
Thanks MichCapCon. The film subsidy was Jenny Grandstand’s Welfare for the Rich plan.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.