November 20, 2009 at 1:00 am

Daniel Howes

Howes: State tax credit to labor union is baffling

Nestled between this week's state tax credits for auto suppliers, a furniture maker and a few high-tech companies is this gem: A $2 million credit to a for-profit affiliate of the Service Employees International Union to build a "Member Action Center."

The "shared organization" would "provide administrative services for the SEIU and other local labor organizations," says the Michigan Economic Development Corp. Despite cost disadvantages here over rival sites, the project would invest $3 million and create 224 new jobs -- in Redford Township.

That, by sheer coincidence, is the home of House Speaker Andy Dillon. He's the Democrat pushing a one-health-care-plan-for-all-state-employees that parts of the SEIU (among the most politically active unions in the nation right now) and other public-employee unions steadfastly oppose.

Which means the SEIU's new center and the hundreds of employees (theoretically) working there would become constituents of a speaker pushing the kind of reform that organized labor is working the Capitol to kill, not withstanding Michigan's "lost decade."

That's not an insignificant detail if you believe that, at some level, all politics is local. A link from the MEDC site to the SEIU Michigan Council urges members to write their legislators to "set the record straight on state employee benefits" and touts a friendly study by Charles Ballard, a Michigan State professor with close ties to the Granholm administration.

The mind reels at the implications of this quiet move by the MEDC's Michigan Economic Growth Authority board -- composed almost entirely of gubernatorial appointees. For starters, it's proffering public resources to the affiliate of a union that represents nearly 13,000 state employees, according the governor's office.

The SEIU, whose Michigan public-sector members work in Corrections and human services, routinely joins lobbying efforts to block structural reform of state government.

When, I asked a ranking official inside the office of Gov. Jennifer Granholm, is the last time the MEDC offered a state tax credit to a labor union or to an affiliate of one? The response: "I don't think we've ever done that."

Tells you a lot. Look, in the worst economy Michigan has seen in two generations -- if not longer -- almost any new job is a good job. The official unemployment rate remains above 15 percent; unofficially, it's certainly higher.

A briefing paper from the MEDC staff to MEGA board estimates that state government revenues would increase $3.4 million with the SEIU project, including the cost of the tax credits, by 2014. The paper also says the site in Michigan is less attractive to the SEIU than rival sites in Missouri and Florida because the costs of doing business here are higher "with higher labor costs being the main disadvantage."

So what else is new? Deep into the "lost decade," with its auto bankruptcies, myriad plant closings and too many state budget cutting rounds to count, Michigan's labor costs remain uncompetitive, as the MEDC confirmed this week.

And the governor's office is content to quietly let that imbalance continue -- whenever, that is, it isn't trying to perpetuate it. In a letter last April, Granholm urged graduate assistants at Central Michigan University to vote in an upcoming union representation election because "unions have been important and constructive members of the higher education family in our state."

Just what you wanted the guv doing last spring as the auto industry reeled, two of Detroit's three automakers headed for bankruptcy, the state economy spiraled downward and drift in Lansing continued -- urging grad students working in a state institution to vote in a union election."> (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays. Catch him Fridays with Paul W. Smith on WJR-AM (760).

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