Tuesday, December 4, 2012

Thoughts on business incentives

G$ pointed me to an article in the Times looking at Michigan's Film Incentive program through the lens of Pontiac's troubled Michigan Motion Picture Studios. The article, part of a larger series called The United States of Subsidies, examines some of the winners and losers from Michigan's experimentation with Film Subsidies. It tells a story we all know too well: businesses will pickup and relocate very quickly to areas with great incentives, but will leave just as quickly when someone offers a better incentive. Bummer.

The series has a great interactive data visualizer that lets you look at the recipients of incentives in each state. Here in Michigan we spend about $6.65 Billion per year on business incentives. That's about $672 per capita per year or about 30 cents for every dollar of state budget. You can also search for recipients of state incentives by city. Here are the top recipients in Ann Arbor:

Not all recipients of state incentives are getting millions of dollars though. For example, Dexter School of Marital Arts, comes in much lower on the list taking in $900 in the form of a "Cash grant, loan or loan guarantee." Business incentives seem like a tempting way to get jobs into a state and help a struggling area. Unfortunately, things are much more complicated that that. Building a vibrant state and stable economy takes a lot more than just stealing jobs from a different state.

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