Fixed Or Repaired Daily: Is Michigan Paying $300 million for a Lemon?
Even though Michigan suffers a $1 billion budget deficit and a potential $2 billion revenue loss from the elimination of the single business tax, the state is going to pay $300 million to Ford Motor Company to help the struggling automaker upgrade aging equipment in six Michigan plants.
Where will the money come from? Does this mean Ford will keep more of the workers it previously planned to lay off or even better, will the automaker create new jobs??? Uh, no.
Half of the $300m will come from the state government, which will borrow $150m against an already-swollen budget deficit.
The other half will come in the form of property tax abatements, where the plants’ home towns will forego additional taxes that Ford would have normally had to pay on its investments.
Ford cannot guarantee that it will create any new jobs, nor offer a guarantee that it will continue to employ all of its existing workforce.
This is in contrast to similar deals where states offer car companies incentives to build car factories specifically to create new jobs.
Why is the state using money it doesn’t have to subsidize a company with poor management practices that is firing workers instead of hiring them?
