Oct. 19, 2023
Upjohn Institute Senior Economist Tim Bartik testified today in the Michigan Senate Economic and Community Development Committee on reforms to a state program designed to entice companies to expand or relocate in Michigan.
Bartik testified before the committee in March on insights gleaned from his research on how to increase return on economic development investments.
Today's testimony came as the committee works to refocus the state's Strategic Outreach and Attraction Research, or SOAR, fund. Michigan established the fund in 2021 to attract "transformational" projects after Ford Motor Co. passed over Michigan to invest in multi-billion-dollar electric vehicle battery facilities in other states.
The reforms under discussion would rename SOAR the Make It In Michigan Fund. Bridge Michigan reports that these reforms would include added focus on transparency and community revitalization.
Bartik detailed three broad conclusions from his research relevant to the committee's efforts:
- States should shift their mix of incentives towards customized business services and rely less on cash incentives,
- Job-creation projects have much higher benefits if they're in distressed counties or if they're coordinated with worker training and support services
- Incentive programs should be subject to budget constraint, ideally as a percent of gross business taxes
Video of the Senate Economic and Community Development Committee meeting, including Bartik's presentation, is now available: