The Legislature begins its year-end stretch Tuesday, and at the top of its to-do list is a controversial business incentive package. The bills are aimed largely at helping Michigan land big battery-powered vehicle factories that could otherwise go to other states.
The bills have wide bipartisan support, but are being blasted by free market and progressive organizations as corporate welfare.
Michael LaFaive is with the Mackinac Center, a free-market think tank. He says history suggests the government-backed incentives don’t yield promised investments.
“They’re also very expensive, especially when you consider opportunity costs,” LaFaive told Michigan Public Radio. “The money dedicated to underwriting a corporation, for instance, might be better spent on efficient transportation infrastructure, other public services, or even across-the-board tax relief.”
The money for the incentives would likely come from federal COVID-19 recovery funds, which cannot be used to fund tax cuts.
Brad Williams is with the Detroit Regional Chamber, which represents businesses in southeast Michigan. Williams says he understands the objections but says they are not realistic in the face of national and even international competition for business.
“The marketplace is what it is,” he said. “We have to deal with the fact that states across the United States are battling for automotive investment. If we’re going to continue to dominate the most-exciting industry in the world, we need to be aggressive about competing for it.”
Lansing is expected to be the location of a new electric vehicle battery factory. But Ford recently selected locations in Kentucky and Tennessee for battery-powered vehicle factories.