The economic benefits of Ford’s electric vehicle battery factory justify what the state is spending on the project. That’s according to research by a Kalamazoo economist.
The state pledged about $1 billion in incentives to Ford through the Strategic Outreach and Attraction Reserve, or SOAR fund, and other programs, as well as another $750 million for site development and transportation infrastructure.
In September, Ford put the project on hold. But last week, the company said it will move forward with a scaled-back version. Ford now expects the site to employ 1700 people instead of 2500.
A new report by Tim Bartik, an economist with the W.E. Upjohn Institute for Employment Research, said the project is still a net positive for the state economy even with the reduction in scope. He estimated that with the downsize, the project’s benefit-cost ratio is about 1.3.
He said that the purpose of incentive programs is increased tax revenue for the government.
“What we're trying to do is to hopefully, provide labor-market benefits for Michigan residents,” he said.
Bartik added that every job created by Ford is estimated to create several more in the state — a higher-than-usual “multiplier effect.” The project is also located in an area of the state that needs jobs.
But not all Marshall-area residents support the project. One group called the Committee for Marshall-Not the Megasite has attempted to bring the site’s zoning to a city-wide vote, but has so far been unsuccessful.
The Michigan Economic Development Corporation told WMUK it does plan to scale back its incentives package to reflect the final scope of the project.
