The challenge of luring business to state
Former Gov. John Engler started this thing.
Gov. Jennifer Granholm continued this thing.
Gov. Rick Snyder tried to modify this thing.
And now state lawmakers are arguing how to continue this thing.
The “thing” is providing tax credits to business to supposedly create more jobs.
The aforementioned Mr. Engler quickly recognized that Michigan was being battered in the highly competitive market of attracting companies to this state. Other states were offering everything but the kitchen sink and there was poor ol’ Gov. Engler trying to convince those businesses that Michigan had plenty to offer. But turns out the businesses weren’t interested in our water, golf courses, and fudge on the island. They wanted cash in one form or another.
The highly competition governor decided to fight fire with fire and formed the now infamous Michigan Economic Development Corporation with the sole objective of beefing up the cash offers to win more jobs. Let the bidding wars begin which is just what the corporate guys wanted.
Coming back to bite the governor in his economic behind was the outside group he helped to create, the Mackinac Center, which coined the new phrase now deeply embedded in the political lingo, “We should not be picking winners and losers. The free market should determine which jobs go where.”
The governor ignored the boys and girls up in Midland and barged into the us vs. them game of luring CEOs to the state.
The MEDC over the years has been a mixed bag of wins and loses. At the outset, they just gave the money away with no commitment that the companies would actually create jobs. So when the jobs never materialized, the state was out the dough under the heading of “you win some, you lose some.”
Enter Mr. CPA, political outsider and new guy from Ann Arbor who proudly announced that Michigan would stop being a “hunter” and become a more docile “gardener.” By that Gov. Rick Snyder meant, he would create a climate around here that would convince companies already here to expand and grow more jobs that way.
Some critics called that “unilateral disarmament” that was an unforced error that gave other states more ammo, a.k.a., cash to beat Michigan on the job front.
Slowly over time and without a formal declaration that the policy was changing, this governor put the gardening gloves in the shed and headed back to the shot gun rack in the house.
Evidence of this reversal is seen all over the joint these days.
There was the Dan Gilbert tax break bill, named after the multimillionaire entrepreneur in Detroit, who wanted the state to give him a back door tax break to construct a host of projects he had. When critics jumped all over the notion of helping a millionaire earn more money with your tax dollars, they dropped the Gilbert label and repackaged the thing into Thrive Mich. which gave no hint of helping the rich.
The governor fully embraced it and recently signed the “thing.”
Now comes the “Good Jobs for Michigan” package, another business tax break plan that the Democrats initially endorsed but are now having second thoughts.
They are asking where will this end and at what cost to taxpayers?
Even some Republicans are waking up to the prospect that maybe this is too much? The D’s point out that the governor came into office and moments after he took the oath there was a billion dollar across the board tax cut for business which the governor promised would jump start the economy but the Democrats contend it produced four flat tires with taxpayers getting very little in return. The two sides agree to disagree.
House GOP Speaker Tom Leonard says he will not stand in the way of the latest foray but that may have been enough to slow this thing down in committee but if the past is any indication of the future, business will pick up another round of state giveaways but at least this package has a provision that ties the money to actually creating jobs.
Some might call that progress.