Michigan Already Awash in Business Subsidies

Lawmakers should reject latest proposal for more

In support of a new business subsidy program, Business Leaders for Michigan writes, “Michigan can no longer afford to be the only state besides Alaska with a corporate income tax – without a program to attract large projects.” But this misleading, because Michigan has dozens of programs that deliver select favors to certain businesses.

The Citizens Research Council gives a list and description of the economic development programs available to businesses in Michigan. It lists 53 programs offered by state, local and federal governments. The report is 166 pages long. Some of the programs mentioned are no longer handing out awards, but most are.

And CRC’s report isn’t all-inclusive. It doesn’t include the Michigan Business Development Program or the Community Revitalization Program that will cost taxpayers $101.5 million this year. Gov. Rick Snyder called for $14 million more for these programs in his budget for next year. The development program alone has offered over $300 million in taxpayer money to select businesses since its inception in 2012.

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Based on their historical performance, these programs are more about press releases than jobs. Plus, they invite corruption and do not justify their costs. Lawmakers should stop creating new, similar programs.

The business leaders also write in their blog that the state needs “a simple but potent tax incentive that’s transparent [and] doesn’t pick winners and losers. ... One that will help grow our communities and grow our families’ paychecks.”

That’s a good idea. The easiest way to make that happen would be to cut the income tax for everyone rather than just handing out more business subsidies for a select lucky few.

Related Articles:

Why Government Fails at Economic Development

A Plea for Skepticism about the MEDC: An Open Letter

Amazon and Foxconn Ignite Opposition To Business Subsidies

What Happens When the Michigan Economic Development Corporation Ends?

Michigan Needs to Rethink How it Does Economic Development