Researchers for the Upjohn Institute found the Michigan Economic Growth Authority tax credits spend about $3,500 to create one job for one year, but those "job years" spur more than $20,000 in economic benefits for the state.
"When you bring additional job growth to a state or local area, you increase wage rates, allowing some people to get better paying jobs," Upjohn Senior Economist Tim Bartik said. "Those benefits are worth something to people.
"Higher employment rates and higher wage rates are worth quite a bit to people -- especially now."
According to the study, which Bartik co-authored with Senior Economist George Erickcek, for each job that received a MEGA incentive, nearly three more jobs were created.
"The program has high economic benefits because of its high multiplier effect," Erickcek said in a statement.
And MEGA grants increased tax revenues faster than public service costs, the study found.
"These fiscal benefits for the state offset about two-thirds of the financial costs of the MEGA credits," Erickcek said.
The report looks at the economic impact of MEGA compared to the alternative of funneling its resources to other government spending. In doing so, researchers estimate the program increased the state's employment by 18,000 jobs between 1996 when it was created and 2007, according to the report.
Thursday, April 8, 2010
So it appears there are some initiatives existing in Michigan that actually ARE creating jobs at a high return. Michigan Tax Credits are proving well beyond their worth, with every $3,500 spent returning $20,000 to the economy. From the Kalamazoo Gazette:
Posted by Public Relations at 2:32 PM