Great Lakes Wire

Michigan's economic development officials have given a few companies rewards to expand amidst the COVID-19 pandemic, but lawmakers across the country should agree to stop offering these deals to companies, one public policy group believes.

James M. Hohman, director of fiscal policy for the Mackinac Center for Public Policy, wrote that Michigan should ask for a "general ceasefire, and lawmakers around the country ought to agree with each other to stop offering selective deals to companies."

Hohman said that only one deal was approved since March by Michigan's economic development organization, and it was slow even before the pandemic, with only 20 deals approved in the past fiscal year. 

Amidst the coronavirus pandemic, economic development officials have been providing relief funds to companies instead of grants to expand.

"Since we’ve unilaterally disarmed ourselves of the selective subsidy programs we use to compete for jobs with other states, though, maybe state lawmakers elsewhere could get together to stop their programs as well," Hohman wrote, according to his Mackinac Center blog.

In the past, officials in the state have tried to match or even exceed other states' deals to compete for jobs, "even if the evidence that they create jobs and improve the economy is poor." Hohman indicated that sometimes lawmakers "got carried away with the dollars they've approved for these deals." He indicated the state still owes $6 billion to companies that received grants a decade or more ago.

Hohman said that the economy today should be taken into account to reconsider competition for companies among the states. He also stated that it would be best to stop offering subsidies altogether.