Amazon HQ2 and Foxconn offers leave cities used

More: United Shore: Giving our tax incentives to children or schools

Regrets mount

Even the potential winners of such a competition sometimes have regrets. Think about what happened in Wisconsin after the Taiwanese technology giant, Foxconn, chose this state for a vast new installation similar to Amazon HQ2. Wisconsin will end up giving more than $ 4.5 billion in various incentives to Foxconn when everything is counted.

In addition to all tax breaks and incentive payments, Gov. Scott Walker has proposed diverting funds from federal highways to other projects in the state that need this money to build a highway near the Foxconn site . And Wisconsin will allow Foxconn to absorb several million gallons of water a day in Lake Michigan.

In addition to all this, the state has shown itself willing to use eminent domain powers to ward off reluctant owners who refuse to sell their land to Foxconn.

These excesses left a bitter taste in the mouths of Wisconsin voters. Walker's defeat Tuesday in his bid for re-election was perceived by some as a reaction against the agreement with Foxconn.

Weigh the costs

What to remember from the binge eating around Amazon and Foxconn? Once a state or city decides to "buy" a major project like Foxconn or Amazon, it's the company, not the state or the public, that takes control. Once engaged, officials find it difficult to draw a line; they must continually inject resources into such a project, always with the justification that the new jobs will be worth it.

But are they? Tim Bartik, economist at the W.E. The Upjohn Institute for Employment Research in Kalamazoo estimates that the cost per new job in the Foxconn agreement is already more than eight times higher than usual incentives. It's a pretty steep price to pay.

Or think of the 50,000 jobs promised by Amazon with HQ2. This would only represent about 1% of Michigan's total workforce. It's good to have, of course, but it's worth giving billions of tax breaks to a company to get them? Maybe not so much.

Now that Amazon seems to divide its headquarters between New York and Washington, the Detroit bid of $ 4 billion in premiums seems even less justified.

Let's not forget that businessman Dan Gilbert has already committed to investing billions of dollars in downtown Detroit and that his group of businesses Quicken Loans now employs about 17,000 downtown workers who were not there 10 years ago.

While the many incentives approved for Gilbert's projects are generous, they are only a fraction of the public spending offered to Amazon.

In other words, Detroit receives almost as much from his son Gilbert as from Amazon, and for a fraction of the price.

It's something to think about.

The debate over the use of tax incentives to stimulate economic development is heating up. Like the controversy about Little Caesars Arena and what Detroit receives for its generous tax incentives.

There are a lot of positives on both sides, and I'm certainly not against tax incentives in any case. This is often justified, especially in a city facing the same type of economic distress that Detroit has been experiencing for decades.

But I know this: Behemoth societies like Amazon should not be allowed to play against each other like Detroit for its own benefit and at our expense.

So the next time a giant company loses the attraction of new jobs and investments in exchange for billions and billions of public dollars, let's take a pass.

TO CLOSE

UAV video from the Foxconn Technology Group research and manufacturing complex in Mount Pleasant at a cost of $ 10 billion on Monday, October 22, 2018.
Mike De Sisti, Milwaukee Journal Sentinel