On February 13, the Michigan Strategic Fund board voted to approve a $210 million grant and other incentives to Ford Motor Company, as part of a reported $1 billion in subsidies for a battery plant in Marshall, Mich. The only public comment at the meeting came from Center for Economic Accountability President John C. Mozena, who had a simple message for Michigan’s primary economic development subsidy entity: “Please, just stop.”
Here is Mozena’s statement:
My name is John Mozena. I am the president of the Center for Economic Accountability. We are a nonpartisan and nonprofit organization that works for transparency, accountability and market-based reforms of state and local economic development programs across the country.
I am a Michigan resident and the CEA is based here in Michigan, but my comments today draw on our experience working to improve economic development policy at the state and local level across the country, as well as my own decades’ worth of personal private-sector experiences in the automotive and battery industries, among others.
My input to this body is simple: Please, just stop. Stop throwing billions of dollars at a shrinking industry that has done nothing but abuse the generosity of Michigan’s taxpayers for decades.
By approving yet another massive subsidy for a massive automotive manufacturer, the Michigan Strategic Fund board will continue to fail at its statutory responsibility, “to promote economic growth and to encourage private investment, job creation, and job upgrading for residents in this state.”
Since 1995, the MEGA Board and then the MSF Board have funneled billions and billions of dollars in subsidies to automotive manufacturers here in Michigan. And yet, there are now 185,000 fewer manufacturing jobs in Michigan today than when we started. There is no independent evidence that these subsidies have been anything other than ruinously expensive failures for the people of Michigan.
We had years like 2015 where automakers cashed in more in tax breaks than the state collected in corporate income taxes from all other companies combined — and yet the jobs continued to disappear. They’re not done yet, either: Just ten days ago, Ford’s chief financial officer said that the company is going to be, “very aggressive” about additional job cuts.
And yet we’re sitting here talking about subsidizing “job creation.” They can dress it up by calling it “mobility” or “electrification” but it’s the same playbook since the Poletown plant of public cost and private profits.
This isn’t unique to the auto industry, as this is a story we see repeat itself over and over again in states with politically powerful industries – Tourism in Florida, agriculture in Iowa, oil and gas in Louisiana and Texas, etcetera. But that’s exactly what this board – what you– are supposed to be the last line of defense against. As members of this board, you are supposed to be guarding against politicians and powerful interests capturing the mechanisms of state government for their own benefit, at the expense of taxpayers.
You are supposed to be representing the interests of the people of the state of Michigan. But for 30 years, this body and its predecessor have rubber stamped some of the greatest corporate welfare boondoggles in American history. I implore you, please take the first step down a different path for our state with a vote against this subsidy today. Thank you.