This article originally appeared in Crain’s Detroit Business February 4, 2026.
For the first time in decades, Michigan’s lawmakers finished a year without authorizing more selective business subsidies. That’s excellent. The subsidies are ineffective at creating jobs, unfair to taxpayers and competing businesses, and expensive to the state budget.
For some context, these deals have averaged around $900 million a year since 2000. To cap off the increasing skepticism about the programs, lawmakers also introduced a bipartisan package of bills to fix some problems with the state’s ongoing business subsidies.
There are lessons to be learned from the state’s disappointing experience with subsidies for favored private companies. Major deals tend to be overpromised; 91% of the jobs announced in press releases fail to materialize.
Lawmakers should be upfront with residents about how these deals work out. Last fall’s announcement that Gotion is not in compliance with state terms, and that administrators would be looking to recover what they spent on the project, was a rarity. People didn’t have to wait for reports that could be over a year old before they were told that the project wasn’t going to happen.
One of the bills would continue this positive trend by requiring administrators to report when deals are terminated or amended. People should also be told about who is going to get a deal from the state before the deal is finished, and this legislation would require that. Perhaps local residents in Green Township could have encouraged administrators and lawmakers to stop the Gotion deal before it was finalized had the state posted the terms it was proposing beforehand.
Administrators are required to report on the status of their deals, but these reports are often delayed or late. The package of House bills would curtail administrators’ authority to write checks to companies that are not meeting reporting requirements.
New programs are required to report on what companies receive from taxpayers. But there’s still a tax credit program on the books. Companies are expected to collect $500 million more than they owe in taxes — and normal taxpayers can’t be told who is getting their money. It’s probably the Detroit automakers who received large credit deals covering virtually all of their employment during the 2007-2009 recession, and those deals are still active. Administrators consider this confidential taxpayer information, even when the company receives hundreds of millions from other taxpayers. The House bills would make this public information again, as it was before 2008.
Beyond refusing to authorize new business subsidies, Michigan’s lawmakers also stopped funding a program that allowed them to write whatever company they wanted checks for however much they wanted to give them. Taxpayers spent $720 million on these programs without any job creation, and we will struggle to get our money back as companies fail to live up to their end of the agreements.
The bill package gives lawmakers a new strategy that they can build on to end selective business subsidies around the country. Michigan legislators have already dropped the state’s biggest subsidy programs, and they should ask lawmakers in other states to join them. The package includes an interstate compact where Michigan would agree with other states to stop competing over who can write the biggest subsidy checks.
Lawmakers often complain that they have to offer cash and favors because other states offer the same. They don’t need to. They can work across borders to agree to compete over business climate and quality of life issues instead.
These are just the kind of bipartisan ideas this package of bills proposes. Lawmakers rejected selective subsidy programs in 2025. They ought to ask other states to join them in 2026. And improve transparency and accountability over what remains.
