State and local governments have been in the business of trying to lure companies from other states to relocate within their borders for decades. They’ve also tried their hand at assisting the development of new businesses and growing existing ones. The state of Michigan has not sat idly. Indeed, every governor back to Kim Sigler in the 1940s tried to put their own “economic development” stamp on the Great Lake State.
Michigan politicians have tried to advance state economic growth here mainly by providing certain businesses and industries with tangible incentives to relocate, expand or start up. The initiatives may come in the form of tax credits (refundable or otherwise), direct subsidies, tax abatements, free or discounted land, inexpensive loans, publicly funded infrastructure and other fiscal favors. The newest of these programs, MI-Thrive and (the now shuttered) Good Jobs for Michigan, involve other types of fiscal favors.
Indeed, the Good Jobs for Michigan program was adopted in 2017, in part, to lure the multinational conglomerates Amazon and Foxconn Technology Group, the latter famous for manufacturing the iPhone.[*] The state offered up billions worth of incentives across several programs if the firms would establish a presence in Michigan. Neither firm took the bait.
The Mackinac Center for Public Policy has written extensively about Michigan-specific economic development programs. Indeed, this is our fifth major study that measures the impact of incentive programs run by state government. The first two studies examined the now shuttered Michigan Economic Growth Authority, the third addressed the state’s Pure Michigan tourism subsidies and the other looked at the impact of Gov. Rick Snyder’s Michigan Business Development Program. The MBDP is a grant and loan program that replaced MEGA.
[*] The Good Jobs for Michigan proposal was adopted in part to help land the (now) infamous Foxconn manufacturing plant that ultimately went to Wisconsin. That Wisconsin deal has not panned out as promised. The program ended on Dec. 31, 2019.