American Greetings Says Goodbye to Michigan

"The MEGA program has brought the kind of leadership and decisive action that will make Southwest Michigan First and the Kalamazoo area a hotbed for job creation." — [Then] SMF chief Barry Broome referring to the Michigan Economic Growth Authority's 2000 decision to award American Greetings a MEGA tax credit deal. 

Just one day after Michigan Economic Development Corporation director Greg Main claimed that Michigan can look forward to a brighter economy next year,  American Greetings offered a stinging repudiation of his agency's failed "picking winners and losers" methodology with the announcement that it would close its plant in Kalamazoo.

The card company has proven itself to be skilled in the gamesmanship of playing one state's "economic development" agency against another in pursuit of discriminatory tax breaks. In 2000 it received a Michigan Economic Growth Authority deal for up to $2.4 million in business tax breaks over 10 years, $400,000 in job training subsidies, and a $2.5 million local property tax abatement. All these special favors were supposed to "create" 200 MEGA-related jobs by 2002. MEDC documents indicate that the actual number was 60.

MEGA is considered the MEDC's and Michigan's "flagship" economic development program, yet this example of one of its "winners" failing to live up to its expectations is hardly isolated. The Mackinac Center's latest empirical analysis of the program indicates that only 29 percent of the direct MEGA jobs promised in MEDC press releases actually come to pass. An earlier study showed that the program has had — at best — no impact on job creation or per-capita personal income in the state since its creation.

When questioned about this particular MEGA failure Greg Main will almost certainly fall back on his tired talking points about how the program's business tax credits are costless and performance based. A closer examination demonstrates that these claims are false.

MEGA is a creator of job announcements, not jobs. It serves the interests of careerist politicians, not taxpayers and Michigan's unemployed. The jobs its central planners and their legislative enablers care most about are their own, not yours. This latest debacle is just one more reason to shut the whole thing down and finally undertake the tax, regulatory and labor law reform that would constitute a genuine "economic development" program for this state. 

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