Growing Concerns over Tax Incentives

When Michigan instituted its “MEGA” system of business tax breaks in the 1990s, the idea was to trickle out the incentives only to major, jobs-providing projects of statewide significance, Michigan State Chamber of Commerce President Richard Studley declared Tuesday at the Center for Michigan’s town hall meeting on state taxes and budget.

Instead, we’re now doling out tax credits like candy, with the most significant beneficiaries being politicians who smile for photo opportunities, Studley charged.

Studley found quick agreement from the author of the MEGA tax credit bill — Business Leaders for Michigan President Doug Rothwell.

Rob Fowler, president of the Small Business Association, joined in, too. He pointed to economic studies showing much future job growth is likely to come through small employers, not the old, big-factory model encouraged through the “economic hunting” strategies of big tax incentives.

The business leaders’ criticism was very much in line with that of the Michigan Education Association, which is funding in-depth evaluation of some three dozen business tax incentive programs across the state. One of the MEA’s chief concerns is the Michigan’s most-generous-in-the-nation film incentives which are bringing movie stars and bright lights to Michigan at a net cost in lost taxes of about $50,000 per job.

Citing the state’s ultra-right-wing think tank, MEA spokesman Doug Pratt concluded, “When the Mackinac Center and the MEA are saying the same thing about tax incentives, Lansing ought to listen.”