Taxpayers to spend $680K per job at Ford’s Marshall battery plant
Bad math and bad business make good politics for those playing on public confusion.
If the expected 2,500 jobs are created at the envisioned Ford Marshall battery plant, they will come at a high cost: $680,000 per job.
Ford itself stands to get nearly $1 billion in corporate welfare ($210 million) and tax abatements ($772 million). When Michigan economic development officials insisted that Ford would get “not a cent” of the $750 million needed to secure and prepare the Marshall land, they forgot about the billion. But yeah, except for the billion, Ford got nothing.
Recouping those funds is a literal impossibility, given that the jobs will pay anywhere from $20 to $50 per hour. Even if the state of Michigan, rather than the workers, were paid those funds directly, it would take many years to recoup.
Related reading: Michigan leaders seek $750M for Ford site in Marshall
Don’t get me wrong. That’s good money for honest work. But the taxes and spending on those salaries don’t come close to the price tag.
This is a bad deal for the taxpayers of Michigan. And for all the talk, among politicians and in the Lansing press, couching the Marshall plan as an “investment,” it’s not, really. Michigan takes no ownership stake in Ford or the factory.
No, this is old-fashioned corporate welfare. This is a few politicians in Lansing spending the money of 10 million people.
This is why the Mackinac Center opposes corporate welfare. It’s a process steeped in politics and partiality. It’s so particular that it can’t be said to bring the general benefits of economic development. These are favors for the few.
Earlier this year, a paper mill in the Upper Peninsula was given $200 million without even a promise that the mill would create a single new job. Why? Because it was good politics for the politicians representing the U.P.
Related reading: In Escanaba, $200M for a paper mill, but no new jobs required
This is what happens when politicians make business deals. It works as politics, but not as math, not as business, and certainly not as economic development.
Lansing politicians and the Michigan media are complicit in the public’s confusion.
When a big announcement is made, the politician gets positive headlines from reporters repeating what’s said at a press conference. The words go from their lips to the public’s eyes and ears, with little to no vetting.
Only much later, after the headline takes root, are such claims fact-checked. If they ever are.
The public then reads those news reports and believes their favorite politician “created jobs” with their vote. Politicians like Gov. Gretchen Whitmer tout those headlines.
And a new generation of Michigander is created who confuses corporate welfare for economic development, cash giveaways for investment, and job announcements for jobs.
James David Dickson is managing editor of Michigan Capitol Confidential. Email him at dickson@mackinac.org.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
Whitmer’s tutoring plan is too little, too late to fix learning loss
Michigan students might have coped better with learning loss if governor had not vetoed a similar GOP plan in 2021
Gov. Gretchen Whitmer’s budget proposal includes funding for the “MI Kids Back on Track” program to deal with the unprecedented learning loss students suffered when schools were closed during the pandemic.
The plan touts personalized tutoring for every K-12 student in Michigan as the panacea for recovering from the lost classroom time. Yet over the past two years Whitmer rejected similar programs that could have mitigated learning losses sooner.
Related reading: Whitmer touts education policy she rejected last year
The costs of this lost time are devastating for kids. In the time it took the governor to strike down multiple iterations of promising legislation, students lost out on valuable learning opportunities and fell even further behind.
Fourth-grade reading scores on the NAEP assessment, also called the nation’s report card, dropped more than at any other time in the past three decades. And average fourth-grade math scores dropped by record levels as well.
Michigan’s fourth-grade reading scores declined twice as much as the national average. These scores placed Michigan at 43rd in the nation in 2022, right below Arkansas and Louisiana.
The M-STEP, Michigan’s annual standardized assessment, produced similar results. The reading proficiency rate for third graders dropped from 45.1% to 41.6% between 2019 and 2022.
But these recent trends should not necessarily be a surprise.
Prior to the prolonged school closures during the pandemic, early literacy scores relative to other states were fairly stagnant. The state’s eighth graders have scored significantly lower on math compared to the national average since 2007. The state’s eighth-grade reading scores have declined since 2019 and shown little to no growth since 2002.
The learning disruptions imposed during the pandemic only exacerbated these concerning trends.
Not surprisingly, policymakers predicted the added toll the learning disruptions would take and acted accordingly. Unprecedented COVID relief dollars poured into districts to support immediate action.
But new legislation that sought to direct this funding to learning recovery programs was repeatedly vetoed by the governor.
Whitmer vetoed $10 million in reimbursements for enrolling kids in summer enrichment programs to combat COVID learning losses in 2021. She then vetoed $155 million for scholarships to cover the cost of tutoring, literacy coaches and professional development to support struggling readers. She also vetoed $500 million for Student Opportunity Scholarships for students to use for academic supports, including tutoring. Just last year, she rejected legislation that would have provided tutoring grants of up to $1,500 to parents to tackle learning losses.
The governor is now proposing $300 million for the MI Kids Back on Track program that purports to provide tutoring for all K-12 students – nearly three years after she forced the schools to close due to COVID-19. She is pushing lawmakers to fund this program by the spring.
But what will the $300 million program actually do to help kids?
The bulk of the funds will cover volunteer recruitment efforts and background checks.
Schools cannot require their teachers to provide afterschool tutoring because of their union contracts. So, they must find volunteers to do so. Finding enough volunteers seems doubtful, especially considering the program’s lofty goal of providing one-on-one tutoring for each of the state’s 1.4 million students.
The program’s $300 million budget also warrants greater scrutiny given the governor’s other spending priorities:
In light of all this spending, getting kids back on track seems only a middling priority for the governor.
The urgency surrounding the governor’s tutoring proposal is overdue given Michigan’s historical standardized test performance and predictable decline during the COVID-19 disruptions. The learning support programs proposed and rejected since the pandemic’s onset could have softened the impact on student outcomes.
Unfortunately, the latest proposal is unlikely to make up for the lost classroom time or get kids back on track.
Molly Macek is director of the Mackinac Center’s Education Policy Institute. Email her at macek@mackinac.org.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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