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Posted on Mon, Apr 9, 2012 : 12:59 p.m.

Pfizer lesson: Do big-business tax incentives deliver?

By Cindy Heflin

Tax incentives, like the one Ann Arbor gave to Pfizer in 2001, often don’t result in the economic benefits local governments think they will, reports Michigan Capitol Confidential, a publication of the Mackinac Center for Public Policy, a free market think tank.

Thumbnail image for 090209_UM_PFIZER_1_LON.JPG.jpeg

One of the former Pfizer buildings, now owned by the University of Michigan.

The article notes Pfizer got the $84 million tax abatement after suggesting it might leave town if it didn’t. Six years later, Pfizer announced it was leaving anyway.

As the Ann Arbor area struggled with the job losses at Pfizer as well as others wrought by the faltering economy, jobless rates rose from 5.5 percent in 2007 to 10.3 percent in 2009, the article notes. But the jobless rate now stands at 5.9 percent.

Big business deals “don’t account for much,” the Mackinac Center’s James Hohman said in a quote in the article.

Community leaders say a coordinated response helped soften the blow of Pfizer’s leaving. The economic development organization Ann Arbor SPARK and its then-CEO Michael Finney played an integral role in organizing that response, local leaders said.

Eventually, the University of Michigan bought the site and has said it plans to have 1,700 workers employed there by the end of the year.


Jeremy Peters

Tue, Apr 10, 2012 : 4:19 p.m.

Why the heck is parroting a horribly biased source like the Mackinac Center for Public Policy. Next time, I'd love to see these things portrayed as a for vs. against. At least let the bias be off set by arguments from the other side.


Thu, Apr 12, 2012 : 12:09 p.m.

Aren't you tired of "arguments"? They aren't even scintillating anymore. Just more political rhetoric. We are ALL being driven down the road to being a third world country. Don't argue, THINK for yourself.


Tue, Apr 10, 2012 : 1:37 p.m.

Whaaa! Lowering taxes does not produce permanent job creation?


Thu, Apr 12, 2012 : 12:08 p.m.

Not in a very poor economy. Too many government regulations and laws to survive no matter what.


Mon, Apr 9, 2012 : 11:24 p.m.

It wasn't that tax breaks failed to retain Pfizer in Ann Arbor. It was Senator Debbie Stabenow's anti-pharmaceutical rhetoric and bus trips to Canada that antagonized the industry. She is single handedly responsible for the exodus of pharmaceutical research jobs from Michigan.


Thu, Apr 12, 2012 : 12:15 p.m.

Let's send Debbie back home to Flint.


Tue, Apr 10, 2012 : 12:07 a.m.

Ridiculous. I guess the fact that Pfizer is closing EIGHT more facilities firing 19k workers and laid off 40k workers between 2003 and 2009 was because of Stabenow. How exactly does Debbie have such power? She has no power over ANY law that pertains to the state of Michigan that would not be the same for another state. Your argument is just plain silly and wrong. Typical of the right wing. Tell a lie often enough and people will believe it. Kind of like WMD's


Mon, Apr 9, 2012 : 8:56 p.m.

Mackinac Center for Public Policy, a free market think tank Such Favorable treatment by the Press. Usually, it is called something like a "far right" or "ultra conservative" group. Free Market sounds about right.


Mon, Apr 9, 2012 : 6:55 p.m.

I googled "fake news publication that parrots the political agenda of its sponsor" and found Michigan Capitol Confidential

shadow wilson

Mon, Apr 9, 2012 : 8:31 p.m.

so that somehow makes their conclusion exactly would you assess the pfizer episode....

Macabre Sunset

Mon, Apr 9, 2012 : 6:48 p.m.

I tried to Google "poor returns for large government cash incentives on the promise of more jobs," and the Internet started giggling. Go figure.


Thu, Apr 12, 2012 : 12:13 p.m.

What don't WE (read government) pay for?


Tue, Apr 10, 2012 : 1:32 p.m.

Is that because google operates on a system whose basis was government funded?


Mon, Apr 9, 2012 : 8:06 p.m.

That's because since Google got some here in Ann Arbor, they've changed their search engine to make the Internet giggle...


Mon, Apr 9, 2012 : 6:42 p.m.

Even with the tax break, Pfizer paid some taxes, the new resident doesn't pay any . . .


Thu, Apr 12, 2012 : 12:04 p.m.

BINGO! You are right on!! Do the residents of Ann Arbor realize how they are being taken for a ride with all the U of M land grabs? Just more government "take overs."


Mon, Apr 9, 2012 : 5:25 p.m.

The only way tax incentives work for the taxpayers is with clear "clawback" provisions that put a value on each job promised and then take that money (in the form of a reduced tax break) back if the employer fails to deliver or, worse yet, packs up and leaves. Cities are, of course, afraid to push for these clauses because employers will always look for a city that won't insist on one. Welcome to the race to the bottom. The best solution is a legislative one, but that has to be on a federal level to avoid pitting one state against the other. Of course, with all the money in state and federal politics, the chances of this kind of simple legislation passing are about 0.


Mon, Apr 9, 2012 : 5:25 p.m.

I hear they only work for movies. I am soooooooooooooooooo in love with seeing movie stars at Zingermans.