Economic Development

S2013-05

Economic Growth and Right-to-Work Laws

This study aims to measure the impact of right-to-work laws on states’ economic performance. It uses average annual growth rates in employment, real (inflation-adjusted) personal income and population to measure the economic well-being of right-to-work states. On the whole, the results of this analysis show that right-to-work laws have a statistically significant and economically meaningful positive impact, although the results vary. … more

LaFaive Cited in Macomb Daily

Repetitive language in press releases is tiresome. … more

Lansing Pols Recycle Press Releases

Tiresome and demeaning to taxpayers

Tiresome and demeaning to taxpayers. … more

'The Freeman' Interviews Rod Lockwood

Mackinac Center board member discusses Belle Isle

Mackinac Center board member discusses Belle Isle. … more

New Strategies Needed for Dealing With Blight

Turning over more property to land banks not the answer. … more

Pontiac Phoenix Center in Ashes

Stop the Presses! All of Michigan's Problems Solved

Bill would make Iosco County "birding capitol" of Michigan. … more
5076 Montauk

Is 5076 Montauk Blighted?

Questions arise over how county land banks operate. … more

GQ Hit Piece on GR ArtPrize

"Like fairgoers sampling sideshows at a carnival." … more

Land Bank Powers Abused, Costly to Taxpayers

Government shouldn't act as land speculators. … more

Kent County Taxpayers Question Land Bank

Group alleges "crony government gone wild" in tax lien sale. … more

Lansing Builds a 'Scaffolding for Plunder'

GOP Representative supports

House Bill 5667 has several flaws … more

Crime Hinders Economic Development

Michael LaFaive in The Saginaw News. … more

The Green Jobs Myth

Paying more to get the same thing does not improve the well-being of families, businesses, the economy or the nation. … more

Taxes and the Life and Death of Great American Cities

Low-tax metropolitan areas experience much greater growth than high-tax ones. … more

State Regulations Suffocate Hospitality Industry

Rep. Doug Geiss (D-Taylor) wants to ease some of the regulatory burdens on Michigan’s hospitality industry. … more

Another MEGA Loser

In the latest government economic development failure in Michigan, Evergreen Solar files for bankruptcy. … more

Good News From Marathon

Extra refinery capacity in Detroit will not only bring jobs and revenue, but also protect against gas price spikes and allow utilization of oil sands. … more

Strange Brew

Legislators to craft brewers: You don't count, but here's a cookie. … more

Some Good GDP News for Michigan

Michigan’s 2009-2010 state GDP growth rate was 2.9 percent, its best since 2002. … more

Lansing Township Action Puts Taxpayers at Risk

Government shouldn't be in the real estate business. … more

Michigan Tax Reform Signed

Changes will make Michigan more competetive

The Michigan Business Tax will soon be no more. … more

Stage Doors and Broken Windows

Brownfield Credits Are No Level Playing Field

There is nothing “fair” about unelected boards deciding which companies pay higher taxes and which companies pay less. … more

Who Benefits From Lower Business Taxes?

Just as individuals respond to changes in their personal financial situations, businesses, too, are affected. And taxing business will surely give us less of it. … more

'Book Him!': Michigan Film Subsidy Scandal Leads to More Charges

A scandal first exposed by the Mackinac Center last June has led to a second set of felony fraud charges. … more

Gov. Granholm Leaves Michigan to Find Work

Today is the 5th anniversary of Gov. Jennifer Granholm’s promise that Michigan residents would be “blown away” by the gobs of jobs her latest economic development program would create. How ironic then that she of all people would flee the state to find work… more

Business Owners Favor MBT Surcharge Repeal

Business owners are cheering a proposal in Lansing to repeal and reform the Michigan Business Tax and the 22 percent surcharge that comes with it, according to WJRT-TV12 in Flint. … more

MBT Surcharge Repeal Could Create 27,900 New Jobs Through 2016

It’s probably no coincidence that the first bill (HB 4001) introduced in Michigan’s new Legislature is to repeal the 21.99 percent surcharge slapped onto the Michigan Business Tax in 2007. The surcharge is despised by the business community, and is seen as a job killer by policy analysts and politicians alike.  … more

Michigan Fiscal Policy a Two-Sided Coin

Michigan residents have a reasonable expectation that elected officials can do more than one thing at time. It is time for our leaders to meet those expectations.  … more

Saginaw Fails to Repeal Prevailing Wage

Saginaw County officials have quietly buried a previously scheduled vote to repeal its “prevailing wage” ordinance for construction projects costing more than $50,000. Prevailing wage laws prohibit granting a government contract to the lowest bidder unless the company pays above-market, “union-scale” wages. … more

The Rose-Colored Glasses of Political Dusk

Despite political spin, Michiganders shouldn't be convinced that the economy right in front of their faces is a sign of progress. … more

Projections vs. Reality

Climate Negotiations Carry a Chilling Message

Recent climate conferences in Stockholm and Cancun have revealed what the global climate change issue is really all about — the transfer of wealth from developed nations to developing countries. … more

Big Labor Vs. Lansing Entrepreneur

Tear Down This 'Film Industry' Facade

Ending the handouts would send a signal that this state is done playing games with ephemeral and failed "economic development" programs, and instead will focus on a real economic growth agenda, including across-the-board tax relief, labor law changes and other regulatory reforms. … more

Michigan’s Economy: From Worst to Average

There's no question that Michigan's economy has performed poorly over the past decade. Essentially, the state lost one out of every five jobs since employment peaked in 2000. However, Michigan's economic trends have changed in recent months. It is no longer the worst performer in the country. In fact, since the end of the U.S. recession, Michigan's performance is average. … more

Bailout Wal-Mart?

Governor Describes Film Subsidies as Jobs Program, so "Why Not Give Them Spoons?"

The headline of a story today's Detroit Free Press characterizes Gov. Jennifer Granholm's understanding of the state film production subsidies' role like this: "Goal of film tax credit is jobs, not more revenue." This reminds one of the late economist Milton Friedman's question upon seeing a U.S. taxpayer-funded public works project in a poor country where thousands of men with shovels were moving dirt one spadeful at a time. … more

Government Subsidy Deal Off for Competitor to Lansing Restaurant Owners

Existing, home-grown restaurant owners in the area — who pay their taxes in full and get no special privileges from the government — are no doubt relieved that they won't have to compete with a politically favored and subsidized outsider. … more

Joe Lehman on Comcast Newsmakers

GlobalWatt's the Deal?

Broken Windows on Display in Michigan Senate Finance Committee

Mark Adler, a lobbyist for the Michigan Production Alliance, and Carrie Jones, the director of the Michigan Film Office, defended the state's film subsidy program in a Senate Finance Committee meeting today. To do so they employed a long-recognized economic fallacy, the "Broken Window" theory, which only considers economic activity that is "seen" while ignoring unseen economic costs. … more

Bill Reveals New Politically Correct Economic Development

A newly introduced bill in Michigan gives new meaning to the phrase "politically correct economic development." … more

Federal Government Wants to Decide Which Car Models Americans Drive

When it comes to which model of vehicle Americans should buy, the federal government knows best — or believes it does. … more

Lawmakers Fail to Answer Questions About Film Subsidy Transparency

A rather blistering May 16 Livingston Daily editorial asked a few simple questions of three state lawmakers about the Michigan Film Incentive and how well it's working. Two of the legislators responded in a guest column Sunday, arguably dodging the real questions raised in the original editorial and putting up a weak defense of the two-year-old subsidy program. … more

States With More College Grads Don't Have Better Economies

Evidence suggests that a single-minded focus on increasing the proportion of a state's population with college degrees is a dead end for improving the state's economy. … more

New Type of "Renaissance Zone": Real Estate Development Bailout Zones

From MichiganVotes.org:
2010 House Bill 6180 (Create "uncompleted subdivision" renaissance tax break zones)
Introduced by Rep. Jim Slezak (D) on May 18, 2010,to authorize the extensive tax breaks and exemptions of a “renaissance zone” for up to 10 particular subdivisions started before the subprime/housing crash, that benefited from a local property tax special assessment levied to pay debt service on money borrowed by the local government to build infrastructure for the subdivision, and which now are only 20 percent completed. “Renaissance zone” status means that businesses and individuals within the zone are essentially exempt from all state and local taxes. See also House Bill 6181, which creates a state revolving loan fund to bail out the local governments that aren't collecting the special assessment revenue they were counting on to pay the debt on the infrastructure projects. The bill is cosponsored by Reps. McDowell, Denby, Rogers, Marleau, Walsh and Daley.  … more

Film Noir

Michigan’s Rank Position

There is no perfect method known for measuring a state's economic well being, or forecasting its future prospects. Nevertheless, over time many scholars using different methodologies have presented a relatively consistent picture: Michigan's economic performance and outlook have trended in a negative direction since their first reports. It's not hard to understand why: Lawmakers here continue to stifle growth with counterproductive policies. … more

Federal Reserve Study: Economic Freedom Matters

A new study published by the Federal Reserve Bank of St. Louis, called "Economic Freedom and Employment Growth in the U.S. States," concludes that there is a link between economic freedom and employment growth. Other studies have come to the same conclusion. One of the things that makes this one different is its findings on labor markets. The authors write: "In addition, we find that less restrictive state and national government labor market policies have the greatest impact on employment growth in U.S. states."
That conclusion doesn't bode well for Michigan, which is known for having a relatively hostile labor climate and which over the last 10 years has seen its overall national economic freedom ranking tumble. … more

Economists: Michigan's Low Personal Income Ranking Won't Rise Again Soon

Michigan dropped to 37th nationwide in 2009 for per capita personal income, sliding one spot as income dropped from $34,953 to $34,025. If one includes Washington D.C. in the rankings, Michigan is now 38th. … more

MSHDA: Michigan's Fannie Mae?

The state housing authority that one developer called the backbone for development and economic activity in Michigan is another victim of the collapse of the housing market.
The Michigan State Housing Development Authority's financial reports show it is in danger of losing money for the first time since the mid-1960s when it was created.
Amid declining revenues and increased delinquent payments on loans it has issued to support development of affordable housing, MSHDA's finances are on shaky grounds, says one expert. … more

Is This the Downsizing Detroit Needs?

Harding to Discuss Natural Resources, Economic Recovery

Russ Harding, senior environmental policy analyst and director of the Property Rights Network at the Center, will take part in a live chat hosted by The Grand Rapids Press at 11:30 a.m. on Tuesday, March 23 (see grey box in Press story titled "Michigan 10.0" for details). The talk will be about how Michigan can best use its natural resources to drive economic recovery. … more

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. During his 11 years in the Legislature, Allen has become perhaps the most ardent promoter and defender of selective tax breaks and subsidies for particular firms and industries. 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… more

MEGA Jobs Announcements Symbolic Drop in the Bucket

The Michigan Economic Growth Authority yesterday approved its latest batch of tax credits to lure large business projects to Michigan.
Despite the press release, these big business projects are just not that consequential to Michigan's total economy.  … more
Gnomes Plan

Kermit the Frog Meets the Underpants Gnomes: Ron Gettelfinger's Pitch for Green Auto Jobs

Easy greenery and magical economic thinking add up to expensive trouble

The UAW chief tells us that there are 190,000 new automotive sector jobs about to be created, and we can have them all right here if Republicans and Democrats do…something. What exactly Gettelfinger hopes they will do isn’t spelled out or even hinted at but it probably involves gobs of taxpayer money. … more
Charlie Owens

Small Businesses vs. Big Governments

Employment Creation in Michigan Illustrates the Ineffectiveness of the State's Incentives

The latest Business Employment Dynamics numbers from the Bureau of Labor Statistics show that from the third quarter of 2008 through the second quarter of 2009, 778,025 jobs were created in Michigan and 1,144,655 jobs disappeared. Among other things, the figures starkly illustrate just how ineffective the state's economic incentive programs are. … more

I Was "Just a Bill," But Now About to Be a Law!

From MichiganVotes.org:
2009 House Bill 5567 (Grant property tax breaks to a particular subdivision)
  • Introduced by Rep. Woodrow Stanley (D) on October 29, 2009, to extend "Neighborhood Enterprise Zone" property tax breaks to the University Park Estates subdivision in Flint, which is less than 10 years old, and is in a "renaissance zone" whose tax-exempt status is expiring soon. Under current law, these particular NEZ tax breaks are for subdivisions built before 1968. They cut the owner's local property tax liability on the structure in half.
  • Passed in the House (89 to 18) on December 8, 2009. [Roll Call Vote, Yeas and Nays]
  • Passed in the Senate (38 to 0) on February 23, 2010. [Roll Call Vote, Yeas and Nays]
 … more
ARRA Sign

A Sign of the Times

Michigan is a great state. A Renaissance in public policy is needed most. Businesses are not leaving the state willingly; they are being run out by unenlightened leadership that does not attract as many innovators as we should. … more

Alice in Subsidy Land

The Pathology of Incubator Fever

Citizens, Investors and Legislative Circus Poodles

We all pay a price when government treats investors, entrepreneurs and households as circus poodles made to jump through hoops in order to collect selective tax-break or subsidy "biscuits" handed out at the whim and discretion of bureaucrats and legislators. … more

Why State "Economic Central Planning" Fails

Reams of empirical evidence indicate that when it comes to increasing the prosperity and opportunities of the people in a state, nation or society, government "economic development" programs fall far short of what their proponents advertise. Here are three of the reasons this is true. … more

More Money After Bad

Throwing money at Detroit only diverts leadership from its core problems. … more

Political Careerism Spawns New Corporate Favoritism Opportunity

Politicians seeking to remain on the government payroll for the rest of their working lives — including 148 term-limited legislators — are eager to create ever more boards, authorities, agencies, etc., empowered to hand out special favors to particular corporations and industries. If pending legislation passes, we could soon have at least five more local authorities with the power to grant corporate favor-seekers a breathtaking array of tax breaks, abatements, subsidies and other favors. … more

Norman Borlaug: An American Hero

Legislative Proposals Revealing of Michigan's Plight

Future historians will find this proposal for a new Michigan law to be revealing about current problems existing in this state, from MichiganVotes.org: 2009 Senate Bill 1015, introduced by Sen. Gerald Van Woerkom, R-Muskegon, on Dec. 10, 2009, to revise the 2003 law that created local "land bank" authorities, so as to include "to promote urban agriculture" among the things they are supposed to accomplish with abandoned, tax reverted property (along with "revitalize the economy, promote economic growth, and foster development"). … more

What It Doesn’t Take To Grow Michigan

In a recent Grand Rapids Press column, Lou Glazer argued that there's a correlation between a state getting more college graduates and enjoying higher statewide income levels.
However, Glazer uses only snapshot views of what the per capita personal income or economic output is in a state right now. He ignores trends. But you can't just wear a white suit to become Mark Twain, you have to grow to the role. … more

Political Careerism the Root of Growing "Economic Development" Empire

History, economic theory and empirical research all demonstrate that discriminatory tax breaks and government subsidies don’t work to grow the economy or expand job opportunities. So why has Michigan’s political class greatly expanded the number and generosity of such programs? The special favors may do nothing to expand jobs for the people, but the growing empire of entities with the power to grant them creates hundreds of potential job opportunities for the political careerists who populate Michigan’s term-limited legislature. … more

Living Here in Allentown

What did it take for Michigan to turn into Billy Joel's Allentown?
Well we're living here in Allentown,
And they're closing all the factories down.
Out in Bethlehem they're killing time.
Filling out forms, standing in line.
 … more

From South Detroit to Shockandawe

Politicians fudging on job stats is getting to be a habit

A pattern of sorts is starting to emerge: When one hears numbers of “jobs created or saved” by various government programs, it appears to be more and more likely that such numbers were pulled by someone out of the vicinity of his or her own back pocket. … more

'Live Free or Die' State Chooses 'Die'

New Hampshire’s inspiring state motto is a tribute to individualism, but it shines a bit less brightly today after the state offered to guarantee part of a “loan” to an ailing newspaper. That’s a mistake, and if the “Live Free or Die” state has any doubt they should look to the record of the Great Lake state. … more

Pew Center Is Wrong on Michigan, Right About Trend

A new report from the Pew Center on the States, Beyond California (pdf), erroneously suggests that Michigan's economic travails are due to the fall of the auto industry and the presence of what it characterizes as an "out of sync" tax system. … more

Water Initiative All About Banning Mining

Michigan voters should not be fooled by the latest effort of environmental groups, called "Mi Water," that purportedly would regulate mining in the state. The ballot proposal does not regulate mining inasmuch as it effectively bans future mining in Michigan. … more

MEGA Stories

Michigan Economic Development Corporation CEO Greg Main boasted that he "would invite (critics) to take a look at the results (of the MEGA targeted tax break program)." We did. Twice. In depth and detail. We found that - at best - MEGA creates no new jobs, and on balance it may even destroy them on a net basis. Further, only 29 percent of the direct jobs promised by its deals ever happened. To date, the MEDC has not refuted a single point of fact, or produced independent, systematic evidence that its approach does squat to create jobs, increase state incomes or expand our economy. … more

Jobs Braggadocio

The Granholm Administration wasted no time after the Michigan Economic Growth Authority monthly rubber-stamp board meeting on Tuesday to start pumping out press releases bragging that more than 2,800 new jobs were coming to Michigan as a result of selective tax break deals for the latest gaggle of "winner" firms and projects. The MEGA-related jobs claims should be discounted by 71 percent, based on a recent Mackinac Center study that found only 29 percent of the jobs promised by past MEGA deals actually happened. … more

Food Stamps and Dyseconomics

Political Class Desperation Index

Coincident Indicator?

More discriminatory tax breaks for the few won't fix Michigan

This chart might be called the "Political Class Desperation Index." The need for transformational reform of Michigan's tax, spending, labor and regulatory environments is indicated by the skyrocketing unemployment rate. The failure of the political class to buck special interests — including government employee unions — and finally undertake those reforms makes its members increasingly desperate to create the appearance of "doing something." Thus the massive increase in futile picking of winners (and losers) for receipt of discriminatory tax breaks and subsidies. These create diversionary "feel good" stories for local newpapers, but do nothing to reverse the state's economic decline — and may even accelerate it. ("MEGA" is the flagship program of Michigan's bureaucratic "economic development" empire.) … more

Turning Michigan Around

How to Fix Michigan? Cut Cost of Living, Working and Investing Here

On Oct. 9, 2009, Michael LaFaive, director of the Mackinac Center's Morey Fiscal Policy Initiative, spoke at the invitation of Rep. Justin Amash, R-Kentwood, at an "Economic Town Hall" meeting convened by the representative. Here's what he told the participants: When I was first asked to participate here I was a bit taken back by the specificity of Representative Amash's request. He said, "Mike, my constituents have endured nearly a decade of bad news. I want you to tell them what we're doing right. Give them the good news." So, in conclusion let me say ...Obviously, I am joking but at the same time, I am not joking. … more

Terror on the Boardman River

As a senior in high school in 1976, I had the opportunity to view the 1968 Halloween horror film classic, "Night of the Living Dead" at the local university campus. A gentleman seated next to me asked for my opinion about halfway through the film, sparking a lengthy conversation on montage and mise-en-scene. The gentleman excused himself shortly thereafter, and appeared on stage as guest speaker upon the film's conclusion. The speaker was none other than the film's writer/director, George Romero. His last words to me before leaving were something along the lines of "You seem pretty sharp, kid. You might want to think about making horror movies yourself." Little did I know it would take me more than 30 years to realize that kind advice. Instead of populating my latest video with flesh-eating zombies and serial killers, however, this Property Rights Network video relates the horrors experienced by property owners on the Boardman River outside Traverse City. Of the four dams on the river, three have been slated for removal by city and county officials. … more

State Pols Fear Warming While Crops Freeze

Maybe Michigan farmers suffering from low crop yields from yet another cold Midwest growing season can recoup their losses by renting out their fields to combat global warming with state-subsidized wind farms? … more

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