Technically, it’s not just Michigan math but government math in general. You know, that new kind of math performed with exacting standards and logic that creates amazing results every time?
Here’s just one teeny-weenie example.
The Michigan Economic Development Corp. (MEDC) handed out tax credits today to 8 companies, ostensibly to create new jobs in the state. MEDC simultaneously announced that they’ve already allocated the maximum credits authorized by their legislative mandate. Unless the state Legislature increases the cap on the amount of tax credits they can grant, they’re out of business for the rest of the year.
The intent of the tax credits, of course, is to create jobs in economically strapped Michigan. How can that be bad? Let’s give them more to spend, right? Kind of like printing our own money.
Well, not so fast. One of the beneficiaries in today’s round of tax payer lotto was Quicken Finance. Quicken was originally going to build a new office headquarters in downtown Detroit, but now says that due to the economy and commercial real estate vacancies in the downtown area, they think it will be better to rent – at least for now. They told MEDC that they still plan on building their own headquarters, probably sometime around the middle of 2013. For now, they’ll be renting 4 floors in the Compuware Building downtown.
In return for relocating in Detroit – and planning to build something, somewhere, some time - they’ll get a 12 year tax credit of around $29 million granted by the MEDC. They’ll also get an $18 million tax credit granted by the Michigan Economic Growth Authority to help them complete their current relocation project. In addition the City of Detroit will throw in parking concessions and additional tax abatements.
So is Quicken moving from Toronto? New York? Ohio, maybe? No, they’re moving from…Livonia. Michigan. Let’s see: net new jobs for Michigan?
I don’t know. You do the math.
I don’t think I have a problem with the MEDC being “out of business” for the rest of the year. I’m not sure how many new jobs we can afford to create.