Giving away taxpayer cash for jobs dicey

It appears the Michigan Legislature is on track to approve $250 million in annual tax incentives for larger businesses.

A pair of bipartisan bills were approved in the state Senate earlier in the week, measures, according to the Associated Press, that would authorize the Michigan Strategic Fund to allow qualified companies to keep a portion of employees’ income tax withholdings for 10 years.

The businesses would have to create at least 500 new jobs or, if they pay a wage that is at least 125 percent of the national average wage, at least 250 jobs.

While Gov. Rick Snyder has thrown his support behind the effort, not everyone agrees it’s the best path forward.

James Hohman, assistant director of fiscal policy at the respected Mackinac Center for Public Policy in downstate Midland, criticized the new bills and noted lawmakers have become more suspicious of such incentives.

“The justification for business subsidy programs have always been on thin ice and Michigan’s spending has a dubious record,” he said for the AP story. “It gives lawmakers the ability to spend taxpayer dollars supporting the businesses of their choosing, with little accountability for the results. We should rescind the programs we already have, not add more of them.”

Separately, AP reported the Senate also approved bills pushed by a Detroit businessman and local economic development agencies that would allow developers to keep new sales and income tax money generated from developing “transformational” projects on contaminated brownfield sites.

That tax capture would be capped at $50 million annually.

At a time when the state regularly pleads poverty, we join Hohman in questioning how effective this initiative really would be.

If this program is enacted, we’d suggest ultra-close monitoring and state withdrawal should the envisioned jobs not materialize.

Giving away big chunks of taxpayer money to develop or keep jobs is dicey on its best day. We trust Lansing decision makers are aware of that fact.

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