I am proud to announce that I’ve been asked by the Speaker of the Michigan House of Representatives to revamp our state’s economic development strategy and tactics. This is a tremendous honor.

Michigan, like many other states, has for many years attempted to attract new businesses by offering taxpayer-funded incentives. The idea behind these initiatives is to generate jobs with competitive pay and promote long-term economic growth for the state, but in reality, most of these efforts have failed to live up to their promise.

During Governor Whitmer’s time in office, Michigan has spent one billion dollars (that’s billion with a “B”) chasing economic development projects. What did we get for our money? The Mackinac Center for Public Policy studied the results of Michigan government “brokered” projects between 2000 and 2020 that promised “thousands” of new jobs. It turns out these taxpayer-funded projects have produced very little; just 90 actual jobs for every 1,000 promised. Nine percent is a failing grade on any scale. This is why Michigan’s economic development strategies need to be reviewed and redesigned.

Many other states provide businesses with incentives to relocate or expand. The question is, how can these government subsidies be applied in the most efficient, cost-effective manner? Let’s look at some philosophical basics.

First, money spent upfront based on the promise of economic development is very difficult to claw back if/when the promises don’t materialize. So here’s the first change we should make: Going forward, all incentive dollars will be paid as reimbursement grants, or claimed as credits on Michigan corporate or pass-through entity tax filings. This rewards businesses only AFTER the desired actions/behaviors have been implemented. There will be no need for claw back language and there are already penalties in place for filing false tax forms. The state could also require an affidavit from a Michigan Certified Public Accountant affirming the expenditures have been made.

Second, all Michigan businesses should have a chance to be rewarded for positive actions and investments.  Whether it’s one business that creates 1,000 new jobs or one hundred businesses that each create ten. The outcome is what’s desired and incentivized. This way, the government isn’t selecting specific “winners and losers.” We’re simply selecting desired actions and rewarding positive outcomes.

Third, there’s more to economic development than just new jobs. Michigan is enriched by optimizing its human capital. A great workforce needs education, occupational skills and licenses, and ongoing professional development that may result in promotions or entrepreneurial expansion. Maximizing our state’s human capital is certainly a public good that warrants taxpayer investment. Public-private partnerships for optimizing workforce expertise must be part of any economic development plan. This includes employer-sponsored daycare and housing support. Michigan businesses must be among the nation’s most attractive places to work. Our uncompetitive average January temperature needs to be offset by great quality-of-life advantages.

In conclusion, (due to limited space) it is essential that we act as responsible stewards of the beautiful environment in which we reside. Turning contaminated and unproductive land back into desirable business locations – that pay taxes – is a critical component of any development strategy. Again, rewarding desired behaviors AFTER action is key. Providing taxpayer dollars in advance and hoping for results is foolish.

I’m excited and honored to be part of a rejuvenated effort to make Michigan the best place to live, raise a family, and build a career or business. There is no reason why we can’t attract the nation’s best workforce talent to the Great Lake State.