Senator Says MEDC Should Stop Believing Its Own Press Releases
A state senator says Michigan's economic development agency's inflated claims of job creation is costing it credibility and leading her to lose confidence in the program.
State Sen. Nancy Cassis, R-Novi, called out the Michigan Economic Development Corporation for its press release that boasted of new job creations that a state audit showed only occurred 28 percent of the time.
At a recent senate hearing, Cassis told MEDC CEO Greg Main, "The press releases are an absolute disconnect with reality."
Michael Shore, spokesman for the MEDC, didn't respond to an e-mail seeking comment.
Cassis said the MEDC didn't seem too concerned that their projections seldom come true. The senator said she's putting together legislation that would require the MEDC to state in its news releases the minimum number of jobs needed to qualify for a particular tax credit.
"They were putting the administration and the governor's best foot forward," Cassis said. "And it was no glass slipper, let me tell you. It gives an almost false sense of actual jobs created."
MIRS News researched the MEDC's job claims under Gov. Jennifer Granholm's tenure.
It found that the MEDC's claim for total jobs added up to 1.4 million. This included retained and indirect jobs and would have accounted for 29 percent of the state's labor force. A retained job is when a company stays in an area due to tax incentives and those jobs don't leave the state. Indirect jobs are jobs created due to the economic activity created by the tax-subsidized business.
MIRS found that the MEDC had claimed credit for creating 204,818 jobs since 2003. A report from Michigan's Auditor General found that 28 percent of the new jobs the MEDC projected actually came to fruition.
Jack McHugh, senior legislative analyst for the Mackinac Center for Public Policy, tracked how many of the MEDC's claims had run in media all across the state.
"Economic development bureaucrats and politicians on both sides are people too, which means the 'saved or created' jobs they care about most are their own," McHugh wrote in an e-mail. "The emptiest file in the cabinet contains government agency press releases that say, 'Our programs don't work, the Legislature should shut us down.' "
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.