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Michigan may be closer to having more transparent and accountable economic development programs. And if it does, it will be because of broad, bipartisan support.
Our state affairs strategist David Guenthner works to coordinate with our friends in the Legislature. In meeting with a number of both Republican and Democratic lawmakers, he heard some skepticism about the state’s spending on economic development, where the state transfers hundreds of millions from taxpayers to businesses each year. This legislative interest gave us a chance to work with them to put together a bipartisan package of bills to improve accountability and transparency in the state’s economic development programs.
They put together a package of five bills that address some specific issues. It allows the public to hear what is going to be offered before administrators sign a deal. It requires reporting when deals don’t go as agreed. If a deal doesn’t go as planned, the state will reduce its aid in proportion to how many fewer jobs the company creates. And if a deal goes sour, the money pledged to a company, or returned from it, goes into the state’s General Fund instead of back to economic development administrators to use for other projects.
And it allows the state to again disclose the recipients of some older discretionary tax credit programs. Select companies received hundreds of millions of refundable tax credits — far beyond what they owe in actual taxes, meaning that the tax credit transferred those millions from other taxpayers to the companies. Despite this expense, the state considers the names and amounts to be confidential taxpayer information, and it does not disclose how much each company receives.
This is a travesty of government accountability. The state can disclose how much it spends on office supplies, and where it bought them, but it cannot disclose which companies collect an estimated $600 million per year, and how much each gets? It’s good thing that the package fixes this problem and does other things to improve transparency and accountability.
Some of the bills’ sponsors have worked with us on different issues in the past, like Republican Reps. Aaron Miller of Sturgis, John Reilly of Oakland Township, and Lynn Afendoulis of Grand Rapids Township. And we also have worked with Republican Sens. Tom Barrett of Charlotte, Lana Theis of Brighton and Jim Runestad of White Lake. And we have worked with Democratic legislators, including Reps. Tenisha Yancey of Harper Woods and Yousef Rabhi of Ann Arbor, as well as Sen. Stephanie Chang of Detroit. Senate Minority Leader Jim Ananich, D-Flint, is a sponsor and Senate Majority Leader Shirkey, R-Jackson, is a co-sponsor of one of those bills, HB 768.
There’s also a broad bipartisan list of co-sponsors on these bills. We were excited to see these lawmakers come together to introduce the package.
Outside support comes likewise from a number of diverse groups. In addition to groups like the Michigan Freedom Fund and the Michigan chapter of Americans for Prosperity endorsing this package, the progressive Michigan League for Public Policy and Good Jobs First have supported it. And spokesmen for the state’s Teamsters and American Federation of State, County and Municipal Employees have said positive things about it as well.
The package was introduced in February and the bills were referred to the Tax Policy committee in the House and the Economic and Small Business Development committee in the Senate. As of March 13, it has not yet received a committee hearing, the next step of the process.
