What is likely to happen next is that we are going to find out in short order that a cap is a bad idea, that the figure is not enough when you have states as close as Ohio throwing hundreds of millions at their economic incentives, and Michigan development officials will soon start to clamor for more money when they can't compete. Remember, Engler tried this in the 90s and quickly had to restore incentives when it became known that Michigan had "unilaterally disarmed in the war among the states for business investment". No reason to think that won't happen again.
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In the ever-escalating war among the states for jobs and business investment, the governor’s economic development team is worried lower taxes are not enough ammunition for Michigan to emerge victorious.
The MEDC has $100 million available this year to attract new business investments and jobs, plus $25 million in film industry incentives. But its request for proposals suggests the state might need to triple that amount of spending.
A proposed calculation for determining the level of incentives says Michigan would need to spend $291 million to lower the state unemployment rate to the five-year national average of 6.8 percent.
And, instead of the old MEGA system that awarded tax credits based solely on the numbers of jobs created, it is being suggested that we just hand businesses cash upfront instead, apparently with very few strings attached. Also, the legislature is quietly putting back the Renaissance Zone tax exemptions as well, although you certainly aren't hearing too much about that either.
So, instead of, "We're going to stop picking winners and losers!" as Snyder's campaign proclaimed, turns out what they really meant was, "We're going to raise your taxes and hand the cash directly to business interests!"
That probably wasn't a winning campaign slogan though.
(thank you to Rick Haglund, who is paying attention to these things)