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Re: The Detroit News' Oct. 23 guest column, “Slashing funds for Pure Michigan is losing gamble”: Advocates for taxpayer funding of the state’s tourism promotion program claim that ending subsidies will represent “a significant blow to Michigan workers and the tourism economy in Michigan.” This is unlikely.

The research I conducted with a fellow economist, Michael Hicks, uses 39 years of publicly available data from 48 states, and it shows the Pure Michigan program is a huge net negative for the state. For every $1 million in funding increase, we found a boost of a piddling $20,000 in extra economic activity shared by the entire accommodations industry in Michigan.

Of the tourism sectors we looked at, accommodations performed best. Hicks has also performed a statistical analysis of Colorado, which had suspended its tourism subsidy program for several years, and he found that doing so had no impact on tourism in the state.

The op-ed cited figures from Michigan’s hired consultant, which show a credulity-straining positive return on investment. Their claims are fraught with problems, however, including — but not limited to — the fact that state consultants leave out about 50% of the costs associated with the program.

Confiscating precious state resources from taxpayers and running ads on behalf of a private, for-profit industry does not help Michigan workers. If anything, it impoverishes them. The program doesn’t work, and money wasted on it could be better spent on higher priorities, like roads and bridges.

Michael LaFaive, senior director

Morey Fiscal Policy Initiative

Mackinac Center for Public Policy 

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