Investment in our state and local economies through economic incentives is imperative to growing prosperity in Michigan. However, the expiration of the Good Jobs for Michigan program in 2019 left Michigan without one of its best tools for encouraging growth — one that will help us recover from the devastating economic effects of COVID-19.
Here’s a case in point: When Good Jobs for Michigan was passed in 2017, Gov. Rick Snyder and members of the Michigan legislature couldn’t have known the initiative would play a role in fighting a deadly pandemic. When Pfizer invested in building a $426 million manufacturing facility in Portage, bringing over 450 good-paying jobs to the state, the Michigan Strategic Fund awarded the company an $11.5 million grant spread over 10 years and funded through a personal income tax capture at no up-front cost to the state. Now, the facility manufactures Pfizer’s COVID-19 vaccine that began distribution this month and is 95% effective at preventing infections from the disease.
Michiganders should be proud of the work carried out in our home state. Without Good Jobs for Michigan, the facility and the jobs created within it would have been offshored.
Overall, Good Jobs for Michigan was a stellar success. In just two years, the program was responsible for 8,200 new, good-paying jobs and generating more than $5 billion in private sector investment through six large-scale projects across the state.
It is vital to understand that those companies benefitting from Good Jobs for Michigan only received the benefit when they were paying the wages of the new jobs they promised to create. Only new dollars were used for the incentive, meaning it had no negative impact to the bottom line of the state’s general fund. It was predictable, accountable, and most importantly, successful.
Since the expiration of the initiative, we do not have the tools at our disposal to compete for expansion or new projects. We sent a signal to the rest of the country and our competitors that Michigan had taken its foot off the gas.
Economic incentives go hand-in-hand with our support for other public goods like education and transportation that make Michigan an appealing state for both businesses and residents. When we fail to invest in our state’s economic well-being, the result is lost opportunity and the growth new and expanded businesses bring to our communities. When we choose not to attract a major new business, expand a Michigan company, or support a startup, we leave the door open for competitor states.
Recently, a business employing over 600 workers was approached by another state and offered millions of dollars to relocate. The loss would have devastated the rural county in which it was located, but the business was retained, and 50 new jobs were created thanks to precise action that included incentives. The retention of the business preserved income tax and property tax, disposable income gained by employees, charitable giving, kids attending schools, families purchasing housing and vibrant neighborhoods. Economic incentives enhance both urban and rural communities and make our state more successful.
In the new year, the legislature can restore Good Jobs for Michigan, and the governor has the opportunity to show our competitors that Michigan is back in the race. Now more than ever, as the state moves toward economic recovery after a pandemic, we must have all the best tools at the ready. We can’t know what opportunities lie ahead and what Michigan’s role will be, but we know that without economic incentives, we won’t play a part.
Formed in June 2020, EDLM is a coalition of 12 regional economic development organizations. Members include Paul Krutko, president and CEO, Ann Arbor Spark; Rob Cleveland, president and CEO, Cornerstone Alliance; Kevin Johnson, president and CEO, Detroit Economic Growth Corporation; Maureen Donohue Krauss, president and CEO, Detroit Regional Partnership; Marty Fittante, CEO, InvestUP; Amy Clickner, CEO, Lake Superior Community Partnership; Jennifer Owens, president, Lakeshore Advantage; Bob Trezise, president and CEO, Lansing Economic Area Partnership; James McBryde, president and CEO, Middle Michigan Economic Corporation; JoAnn Crary, president, Saginaw Future; Ron Kitchens, senior partner and CEO, Southwest Michigan First; and Birgit Klohs, president and CEO, The Right Place Inc.