Michigan Gov. Gretchen Whitmer called on lawmakers to spend more on a business subsidy program because the Pfizer plant in Michigan that produces a COVID-19 vaccine received taxpayer money. This is a weak justification, as the relationships between state subsidies and vaccines are unclear. And policymakers should be careful not to leverage the pandemic for unrelated policy preferences.
Pfizer reports producing vaccines in Michigan with supplies from production facilities in Missouri and Wisconsin, plus more final manufacturing inBelgium. So Michigan taxpayer investment seems like it wasn’t a prerequisite in producing a vaccine. The federal government’s decision to purchase doses of a vaccine that doesn’t yet exist helped get the vaccine developed.
As to whether parts of the vaccine would be developed in Michigan without special state assistance is, at best, unclear. State briefings do not mention that the company was considering competing sites to Portage. It does mention that the money addresses “competitive disadvantages with sites outside the state,” which is a requirement to receive assistance, but doesn’t require company officials to actually consider other places.
The state’s memo does mention that it will take eight years to complete, so giving credit to state assistance may be misplaced. It’s not as if the only reason Pfizer worked to build a COVID-19 vaccine was because it received state assistance in 2018.
Whether lawmakers ought to approve more spending on this program shouldn’t rely on this unique situation. They should consider whether the benefits exceed the costs. For this program, it’s been all projected costs and no benefits: The latest report says that there are no jobs yet at any of the facilities that have received awards through this program. But the state is bad at transparency, and lawmakers do not seem interested in doing better.
Business subsidy supporters themselves claim that creating “good jobs” is their goal. What this has to do with COVID-19 vaccine manufacturing is not evident. Analyses of other similarly structured programs have shown that awarding select companies taxpayer money is a costly enterprise that has little demonstrable benefits.
The pandemic is a terrible thing that has claimed too many people’s lives. It ought to be a source of pride that Michigan residents have been part of the relief, treatment, support, recovery and vaccination efforts. Select business subsidies should have nothing to do with it.
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