MEGA Death

Michael LaFaive and Michael Finney
Michael LaFaive (l) and MEDC CEO Michael Finney discuss state incentive programs on WJBK-TV2's FlashPoint.

While the Mackinac Center employs an eclectic group of people with varying tastes, none of them admit to listening to  the 1980’s thrash metal band Mega Death. The title above instead refers to the Michigan Economic Growth Authority, the state’s primary “jobs” program. Born in April 1995, MEGA this year was eliminated by the Snyder administration.

This is a tremendous policy victory. Over the years, Center research repeatedly found that MEGA was as unfair as it was ineffective. Center analysts produced three major studies — and numerous essays, commentaries and investigations — of MEGA, all of which were instrumental in creating an environment where the once-popular program could be dumped with little opposition.

The first study was an analysis of the MEGA program as proposed by policymakers. The subsequent studies, published in 2005 and 2009, contained statistical analyses of the program.

The 2005 study found that for every $123,000 in tax credits offered by the program, only one construction job was created — and 100 percent of those disappeared within two years. The second study found a negative association between MEGA tax credits earned and manufacturing employment.

Earlier this year, the findings from the 2005 study, authored by Mackinac Center Director of Fiscal Policy Michael LaFaive and adjunct scholar Michael Hicks, were published in the peer-reviewed journal “Economic Development Quarterly.”

LaFaive’s expertise on MEGA and related programs became a valuable resource for reporters and legislators. He conducted multiple interviews on the subject, testified before several legislative committees and addressed MEGA’s failings in numerous speeches around the state. The Center’s relentless exposure of the failings of this program prevented Lansing politicians from ignoring the wasteful nature of their central planning.

Of additional importance, the Snyder administration stopped reporting alleged “spin-off” jobs relating from state economic development work — another recommendation made by Center analysts.