Michigan Manufacturers Association highlights economic development strategy for job growth

On March 19, 2025, the Michigan Legislature's Subcommittee on Corporate Subsidies and State Investments convened to discuss the state's economic development strategies, particularly focusing on the effectiveness of the Michigan Economic Growth Authority (MEGA) tax credit program. The meeting highlighted the ongoing challenges faced by Michigan's workforce and businesses, especially in the wake of the Great Recession.

The discussions began with a reminder of the economic difficulties that both the state and the nation experienced during the recession. Lawmakers emphasized the importance of the MEGA tax credits as a tool for job retention and investment during that challenging period. However, some committee members expressed skepticism about the program's long-term effectiveness, noting that despite its initial goals, it had not consistently delivered the promised job growth.

Mike Johnston, Executive Vice President of Government Affairs and Workforce Development for the Michigan Manufacturers Association, provided a detailed overview of the manufacturing sector's significance to the state's economy. He reported that manufacturing contributes over $111 billion to Michigan's economy and employs approximately 610,800 people, with an average annual compensation of $92,439. Johnston argued that retaining existing companies and attracting new investments are crucial for economic growth, especially as neighboring states offer competitive business climates and incentives.

Johnston pointed out that Michigan's corporate income tax rate ranks 26th in the nation, which could hinder the state's ability to attract new businesses. He stressed that a competitive business environment must be complemented by effective economic development incentives to ensure that Michigan remains an attractive destination for investment. He highlighted the multiplier effect of manufacturing jobs, where each job in the sector can create multiple additional jobs in the supply chain.

The committee members engaged in a dialogue about the potential for lowering taxes across the board to create a more business-friendly environment. Johnston acknowledged the need for tax reductions but cautioned that simply lowering taxes would not be sufficient to drive economic growth without accompanying incentives to attract investment from other states.

In conclusion, the meeting underscored the critical need for Michigan to refine its economic development strategies to compete effectively with other states. The discussions revealed a shared commitment among lawmakers and industry representatives to foster job growth and investment, while also recognizing the complexities involved in achieving these goals. As Michigan continues to navigate its economic landscape, the outcomes of these discussions will play a pivotal role in shaping the state's future economic policies.