A University of Michigan-Flint economics professor is pushing back on Gov. Gretchen Whitmer’s recently announced scheme to use federal taxpayer dollars to assist businesses feeling this year’s warmer temperatures during the winter months.

On Wednesday, the governor sent a letter to U.S. Congressional leaders and department heads of the U.S. Small Business Administration  and Federal Emergency Management Agency seeking federal assistance for Michigan’s winter tourism industry.

“Michiganders are used to tough winters, but this year’s record-setting warm winter has been tough in a different way, causing economic hardships for small businesses and regional economies that rely on snow,” Whitmer said. “I appreciate the federal government working with us to deliver financial relief to businesses in 43 counties around the state. However, this solution left out many counties that truly need assistance, which is why I’m asking the federal government to create new paths of federal relief for all impacted. We know climate change will only exacerbate this issue in future years, and there needs to be reliable and well-tailored programs to help in those cases.”

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Under current guidelines, SBA Economic Injury Disaster Loans may provide up to $2 million in assistance to businesses experiencing threats to economic well-being as a result of a natural disaster such as drought. The loans are interest free for the first year, with a maximum 4% rate for the duration of the remainder of the loan.

But UM-Flint economist Chris Douglas disagrees.

In an interview with The Midwesterner, Douglas sympathized with business owners negatively impacted by Michigan’s warm winter, but noted that the risks of operating such a business is understood in the same way cooler summers result in negative economic impacts for boating and swimming.

“The warm winter was unfortunate for seasonal businesses like ski hills, snowmobile rentals, restaurants, and traditional winter destinations like the Upper Peninsula, he said. “But if you have a seasonal business, that’s the risk you take that the season doesn’t cooperate.”

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Douglas continued: “Do we want to go down the path where the federal government starts bailing every business out and every individual out?  I guess facing risk is just the cost of doing business and pass along the cost of that risk to the taxpayer? I’m sorry, how is that fair to people in Southern states? I mean it’s like saying if there is a unseasonably cool summer and we’re going to start bailing out and giving relief to golf courses in the Gulf of Mexico.”

He concluded: “The whole problem with bailouts is that you privatize the profits and socialize the losses in the sense of if there’s like a super super cold winter with lots of snow we don’t want to go clawback those profits from seasonal businesses to give back to taxpayers who paid for the bailout.”

Douglas added that sometimes businesses should build a rainy day fund that uses profits from the good years to ride out not so good years.

Whitmer’s letter notes that the Michigan Snowsports Industries Association that the ski industry lost approximately 22% of winter revenue due to the warmer weather between Christmas Day and New Years.

“[MSIA] also shared that normal revenue at Michigan’s 30 ski areas over the Christmas/New Year holiday week totals between $39 and $40 million, but revenue this holiday week was only $12 million,” Whitmer’s letter stated. “MSIA also estimates that the additional losses are over $13.7 million and will increase, while in total, they estimate Michigan ski areas have lost over $41 million.”