Aug. 19, 2015

Contact: Dan Armstrong (989) 698-1917

MIDLAND – Michael Van Beek, director of research at the Mackinac Center, will debate Lansing mayor, and former Michigan gubernatorial candidate Virg Bernero on the issue of taxpayer-funded economic development at the Michigan Economic Developers Association Annual Meeting on Thursday, Aug. 20.

The Mackinac Center for Public Policy has long held that taxpayer-funded economic development programs do more harm than good, allowing governments to pick winners and losers and hand favors to special interests. Michigan’s main corporate welfare arm, the Michigan Economic Development Corporation, through its now-discontinued MEGA program, attempted to lure new jobs to the state through tax credits and other incentives. Research by MIRS News showed only 19 percent of projected jobs come to fruition.

In addition to its poor performance at creating jobs, the MEGA program left behind $9 billion in unclaimed credits, which businesses may redeem through the next several decades. This amounts to an enormous unfunded liability in the state’s budget.

One of the most egregious examples of corporate welfare was the state’s film subsidy program, which doled out millions of dollars each year to a notoriously rich and transient industry. When Gov. Rick Snyder finally signed the death warrant for film incentives earlier this summer, Michigan’s film industry actually had fewer full-time jobs than it did when the program began.

“The argument against targeted tax breaks and other forms of corporate welfare is simple,” Van Beek said. “They’re unfair, they’re ripe for abuse and the academic research shows they don’t work.”

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