Stop Pointing Out Our Failures, Says MEDC
After awarding $9 million in tax credits to a convicted felon and a report that showed it only helped create 18,000 jobs in 11 years, the Michigan Economic Development Corp. today issued a statement saying it is "deeply concerned" over "unwarranted criticism," according to annarbor.com.
Michigan Capitol Confidential recently published an expose on Ann Arbor-based Google's lack of progress in adding jobs, despite a $38 million MEDC subsidy. Mike LaFaive, director of the Morey Fiscal Policy Initiative, has conducted two exhaustive analyses of MEDC and the Michigan Economic Growth Authority, which MEDC administers, in 2005 and 2009. Neither agency has ever refuted a single point of fact in either. The second study determined that less than one-third of jobs the MEDC has announced in press releases have come to fruition.
LaFaive also authored a Policy Brief titled "MEGA, the MEDC and the Loss of Sunshine," which details the lack of transparency in the MEDC and the difficulty involved with evaluating its effectiveness. MEDC officials also have admitted the agency did not audit any businesses that received subsidies for 10 years, which one legislator called "willful neglect." MEDC President Greg Main has agreed with LaFaive that the agency should be more transparent.
Michigan has not experienced GDP growth since the MEDC was created, although LaFaive suggests several ways the agency can be fixed.
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I think some of this is over the top. It isn't proper the MEDC by noting that Michigan's GDP has declined since it was created. It is certainly possible that the decline in GDP would have been even worse without the MEDC. Further, I question the propriety of criticizing the effectiveness of the tax breaks and then maintaining that cutting taxes in general would attract new businesses and encourage the expansion of existing firms.
On the other hand, I definitely agree with the call for greater transparency and measurement of results. I was quite surprised to learn that there wasn't adequate follow up.