The state of Michigan spent 15 months trying to lure a manufacturer of computer memory to the Lansing area, ultimately offering Micron Technology $3.2 billion in direct state support and nearly $28 billion in state and local incentives over the life of the deal. The $3.2 billion in state incentives is three times the entire budget of the Michigan State Police.
The Detroit News reported on the deal:
If Micron had accepted Michigan’s offer, the $2.5 billion incentive alone would have exceeded the individual annual budgets last year of about a dozen state departments, including the Michigan State Police, the Department of Natural Resources and the Department of Environment, Great Lakes and Energy. It also would have been more than the budget of the Michigan Department of Corrections, which received roughly $2.1 billion last year.
The Michigan Economic Development Corporation, the state agency that negotiates special deals with select businesses, offered $2.5 billion in “critical industry” funding and $750 million in “site readiness” funding. Hundreds of million more would have come from other state programs. More than $23 billion would have come from local “Renaissance Zone” tax abatements. Micron rejected the deal and chose to locate in New York, which actually offered less in upfront cash to the company than Michigan did.
The Michigan State Police will receive $773.4 million in the upcoming fiscal year. That supports 3,839 jobs. The Micron project is projected to hire 9,000 employees. In other words, in year one, the state of Michigan would have spent as much for a Micron employee as it does on each of its state police officers.
The nearly $28 billion in total incentives offered for the projected 9,000 jobs is equal to more than $3 million per job. James Hohman, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, notes that the track record of incentive programs suggest most of these jobs wouldn’t have materialized anyways.
“Private companies should not be the recipients of billions of taxpayer dollars,” Hohman said. “Michigan lawmakers should instead work with other states on an agreement to stop handing out wasteful and ineffective business subsidies.”
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