Taxpayers are paying more than $680,000 for every single job created at the planned electric vehicle battery plant in Marshall, Michigan. With state incentives that exceed $1.7 billion and a promise of 2,500 new jobs, some may question whether the math makes economic sense.
Tax incentive programs like Michigan’s SOAR fund are controversial, but site selection expert Christopher D. Lloyd said at last fall’s West Michigan Policy Forum biennial conference that incentives could move the needle forward if done properly.
“Incentives are not inherently evil, but they don’t make a bad deal good,” Lloyd said. “(Michigan) should make sure that incentives are spent on activities that are going to last in their communities.”
For example, Lloyd said the state needs to invest more to improve its infrastructure. Although Michigan has taken some steps to do so, it continues to be a challenge.
“When corporate decision-makers and CEOs come into a community they look at the roads, they look at the infrastructure, they look at the utilities, and decide if this is a community that cares about its infrastructure, and they make their decisions based on that,” Lloyd said.
“Another way to effectively encourage economic development is to invest more in people,” Lloyd continued. A strong and vibrant workforce also is a driving factor on whether companies decide to locate in a certain state.”
In addition, Lloyd said “speed to market” issues are emerging as one of the most important factors in site selection decisions. How quickly companies are able to get through a state or local community’s permitting process matters. Delays cost money, and Lloyd said companies are looking for regulations that are streamlined, efficient, and fair.
Ultimately, Lloyd said smart companies aren’t looking for a pot of cash in order to move to a new state. Decision-makers are looking to build relationships and find long-term partners. Companies, he stressed, don’t relocate to a state for two or three years, they’re looking for a 20- to 30-year commitment.
Lloyd said business leaders across Michigan must take an active role in contacting policy-makers to ensure their elected leaders work to improve the business climate. Please contact your local legislators and tell them to work to enact pro-business, pro-economy measures to help Michigan become a top 10 state.