New Mich. Governor Wants to End Tax Credits and Subsidies for Failed "Job Announcement Programs"

MIDLAND, MI — Gov. Rick Snyder's flat corporate income tax proposal would eliminate Michigan Economic Growth Authority tax credits, including the film subsidy, and represents a victory for taxpayers and good government, said Mackinac Center Director of Fiscal Policy Michael LaFaive.

“This is a bold move to fix Michigan with a simpler business tax system and one that would eliminate ‘jobs' programs that don't create any,” said LaFaive.

The Mackinac Center has been the longest and most consistent critic of MEGA and other economic development programs. In 1995, Center analysts published a study that warned against undertaking the MEGA program. A 2005 Mackinac Center study found that for every $123,000 in MEGA tax credits offered, the program created just one construction job, but 100 percent of those disappeared within two years. The Center's 2009 MEGA study found an association between manufacturing jobs and the program, but it was negative. That is, for every $1 million in tax credits actually earned by MEGA companies in a given county, there was an associated loss of 95 manufacturing jobs in that county.

“At best, MEGA is a job announcement program, not a job creation program,” LaFaive added.