by Scott McClallen
After a 15-month pursuit, Michigan failed to persuade Micron Technology to build its semiconductor manufacturing plant in Eagle Township.
The Detroit News first reported the story, saying the company picked New York after the Empire State offered nearly $6 billion in incentives for Micron to create nearly 50,000 jobs over 20 years, a press release says.
The semiconductor manufacturing campus is valued at roughly $100 billion over 20 years.
Michigan won’t disclose how much taxpayer money it offered the company. The News reported dozens of state and local officials signed nondisclosure agreements to keep the public in the dark regarding how much money Michigan offered the company.
After Michigan lost out on $11.2 billion of Ford’s electric vehicle factories subsequently located in Tennessee and Kentucky in 2021, government officials started offering more and more subsidies to companies, attempting to stop population loss.
More than 40,000 residents have left the Great Lakes State since 2020.
John Mozena, president of the Center for Economic Accountability, a nonprofit organization for transparent economic development policy, said that it’s good for taxpayers that Michigan didn’t “win” this deal.
“New York is welcome to pay more than $550,000 per subsidized job, Michigan’s already got plenty of terrible economic development deals of its own that taxpayers will be paying off for decades to come,” Mozena wrote in an email to The Center Square.
For example, Michigan taxpayers will foot more than $700,000 for each job created by Ford’s BlueOval plant near Marshall. In contrast, the average wage of the 2,500 anticipated jobs created is only $45,136 annually.
The Michigan Economic Development Corporation also offered EV battery component maker Gotion up to $1.1 billion in subsidies counting state, local, and utility incentives, which includes a 30-year tax break to the company.
Mozena said it’s become increasingly clear that when it comes to economic development, public officials are more concerned about the companies’ best interests rather than the taxpayer’s best interest.
“Public money demands public transparency, especially when the price tag is in the billions,” Mozena wrote.
States in which governors are running for reelection are twice as likely as those where they aren’t to make giant subsidy deals, Mozena said. Moreover, those governors also control billions of subsidies through local economic development agencies.
The failed project happened just weeks before the 2022 November election, behind closed doors. Mozena questioned if economic development agencies and politicians are working in the best interest of themselves seeking reelection or taxpayers.
“We’re expected to believe that they’d turn down a deal that would be politically profitable for an elected official if the ROI was a bit sketchy for taxpayers, or that an agency would shut down a non-performing program even if that meant losing jobs for bureaucrats,” Mozena wrote. “I don’t think any average person thinks that’s the way things really work, which is why transparency is so incredibly important.”
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi. In 2021, he published a book on technology and privacy. He co-hosts the weekly Michigan in Focus podcast.
