Unemployment Comparison of Port Huron to St. County and Michigan

“The EDA Report Card”

How do you measure the effectiveness of the EDA?  Over the past 20 years the unemployment in the City of Port Huron has always been higher than that of St. Clair County, averaging 2.92 percentage points, higher.  In the best of times, it was 4.6%, while the County was 3.4%, in the worst times it was 25.2% when the county was 18.6%.

Quarterly rates,    #1 = June, 1990 and #79 = March, 2010

A similar comparison exists between the County and State.  St. Clair County averaged 4.5% percentage points higher than Michigan as a whole.  Only eight times out of 229 months was the County rate lower than the State.  In the best of times, it was 3.4%, when the State rate was 3.3%, but in bad times it was 18.6% when the State was at 14.5%.  If the State were a dog, then the County would be the tail, and the City is under the tail…. 

Perhaps this is the rational for charging Port Huron a disproportional share of government assistance to the EDA – the City needs their expertise more than the rest of the County.  I suspect a better reason is that the money is easier to get from the City than from the Townships.  The city can bypass the vote of its residents and just raise water rates to generate more revenue – the townships, or county, would need to pass a millage for additional revenue – fat chance of that happening.

Mayor Pauline Repp says that the city has budgeted $100,000 for the EDA.  She is waiting on City Manager Bruce Brown to determine which rat hole to pour the money down.  When the last council voted to leave the County EDA, a good move, they then listened to Manager Brown and hired their own experts at rounding up jobs, nullifying any savings.  There is little, if any, evidence that they have been successful.

To get an indication of the EDA’s success, just look at their website, at www.edascc.com .  It is a pretty and well designed site, full of fluff.  Under “Recent Success Stories” they list:

 “Energy Components Group, LLC (ECG)

Energy Components Group, LLC (ECG) has chosen St. Clair County for the location of their new manufacturing facility to service the alternative energy market focusing on solar and wind opportunities. The EDA provided site selction assistance and the coordination of an incentive package that included a MEGA employment tax credit, workforce training grants and the offer of a Renewable Energy Renaissance Zone (RERZ). Teamwork with the MEDC, St. Clair City Council and St. Clair County Board of Commissioners helped to eliminate red tape and solidify this alternative energy company.  Investment: $20.2 Million  Jobs: 250 jobs (over next several years)”

 Who created the red tape that needed to be cut through?  Who lobbies for higher taxes that need to be abated?  Are these investors so stupid that they can’t find the industrial park and need site selection assistance?

Second on the list:

“Chrysler, LLC

Chrysler calls St. Clair County home with the announcement of a $366 Million dollar investment in a new axle plant in the City of Marysville. The axle plant is now under construction on a 211 acre parcel and when fully operational is expected to employ 750 directly with approximately 250 additional in-house contract positions. The EDA assisted Chrysler with its site selection process and coordinated a comprehensive and complicated package of incentives resulting in the decision of Chrysler Corporation to locate this facility in our community.  Investment: $366 Million  Jobs: 750 direct and 250 +/- in-house contract positions “

How many jobs?  You might want to update that figure.  Since this announcement, Chrysler has been nationalized.  Crony Capitalism at its best – raise taxes on all businesses so that tax incentives can be given to some.

A more recent success story would be the granting of tax abatements by the City of Port Huron to four companies located in the Industrial Park (a TIFA district), estimated to reduce tax revenue by $120,000.  These companies showed up to “sing the praises of the EDA”, at a recent city council meeting.  They return, again and again, to apply for tax abatements, and are thrilled with the assistance they receive by the EDA.  With a veiled threat of leaving town if abatements are not granted, the EDA’s mission is modified - if they cannot create jobs, they must save them.

The EDA and similar organizations actually help to destroy the climate necessary to foster real growth.  They cater to marginal companies that require government assistance to survive.  Solid companies with a long term view, are not fooled by getting a short term incentive.  They know that when the short term is over, they will have to pay higher taxes to carry the corporate slackers.  Those financially sound companies have been going south, to states with “Right to Work Laws” and favorable tax and regulatory policies that apply equally to all.

Port Huron has a rich history of entrepreneurs.  The industrialists who built our city did not rely on nanny state treatment.  They were risk taking innovators.  We need men and women of that caliber. They will not show up in today’s St. Clair County.  Michigan and the Blue Water Area have much to offer if the leaders in Lansing will remove some of the impediments to investing in our State, and all of the good intentions and meddling of local bureaucrats and/or government subsidized agencies will not hasten but will only delay the process.