News Story

Bad News About State Jobs Program "Not Heard" by Granholm

In a recent interview, outgoing Gov. Jennifer Granholm said she had no idea that the job creation announcements over the course of her two terms had been contradicted by studies finding that just over 70 percent of the bragged-about jobs were never created. James Hohman, fiscal policy analyst for the Mackinac Center, was stunned when he learned that Granholm told the Michigan Information and Research Service that she hadn’t heard of any evidence contradicting the rosy job scenarios she had been promoting through the embattled Michigan Economic Development Corporation.

MIRS alluded to these studies in a question to the governor last week, asserting that only one-third of the jobs were ever created and asking her whether it would have been better to have been more “up front” with this statistic in her monthly press releases.

The governor replied that she was unaware of any challenges to her job creation claims:

“I've not heard that. I don't know what that is that you're talking about . . . You're talking direct and indirect?”

When asked if she really believed all of the boasted-about jobs would be created, the governor again defended the initial estimates, saying that the CEOs of companies getting the special deals are “very conservative” in their job creation projections and that they are “very conscious of not over-promising.”

Hohman says evidence of the failed job projections has hardly been kept secret.

In August 2009, the Mackinac Center released a study which found that only 28 percent of the “direct” jobs that were reported by the Michigan Economic Development Corporation had actually been created. A “direct” job is one created by the company that received the tax incentive.

Then in April 2010, a report from Michigan’s Auditor General verified the Mackinac Center study. It too found that about 28 percent of projected “direct” jobs from deals announced by the MEDC came to fruition.

And there was more.

A month later, the MEDC made headlines when it released a letter pleading with the media and legislators to stop “unwarranted criticism” against it.

And after this, in a Senate hearing in August, a state senator challenged MEDC CEO Greg Main to stop using the exaggerated job creation numbers that the MEDC was citing in its press releases.

State Sen. Nancy Cassis, R-Novi, told Main: “The press releases are an absolute disconnect with reality.”

Hohman wonders how Granholm could have missed all of this, considering that she spent so much of her time in office talking about jobs that the state’s economic development planners were supposedly luring into Michigan.

“If a person sits through Governor Granholm’s electronic video portrait, they might think that the governor is interested and aware of her economic development programs,” Hohman wrote in an e-mail. “She spends nearly the entire production on her efforts to foster job-creation.”

Hohman wrote that the MIRS story “shows that she is an ostrich with its head in the sand about the failures of the programs she supports.”

“Instead of ducking from the failures and falsehoods of the state’s economic development programs, the incoming Snyder administration should reform them. The first step is to acknowledge the capabilities of the programs. The state will not turn around through selective tax abatement programs, and there is a great need to review them to find out exactly what the state wants to accomplish — and eliminate them if they are not designed to succeed in their goals,” Hohman wrote.


See also:

MEDC vs. Kentucky

Senator Says MEDC Should Stop Believing Its Own Press Releases

Analysis: MEDC Letter an Admission of Failure

Manufacturing a Legacy

Jobs Projections vs. Reality

No Audits for Ten Years on Companies Getting Special Tax Breaks from State

Experts Say State Battery Plant Subsidy Is a "Risky Venture"

Michigan Taxpayers Writing Check to Second Electric Car Battery Maker for $100 Million

Michigan Governor Touts Jobs Costing Taxpayers $113,000 Each

Cost to Revive Economy With Battery Plant Subsidies: $5 Trillion 

Lawmaker Says 'Willful Neglect' Is the Rule at Embattled State Agency

Lawmaker Says Special Tax Favors Are 'Cronyism' 

Small Businesses vs. Big Governments


Gov. Granholm Offers Nation Advice on Job Creation

"...Funny Numbers They Pull Out of Their Backside"

Does Michigan Adding Jobs in July Redeem the Granholm Record?

Governor Describes Film Subsidies as Jobs Program, so "Why Not Give Them Spoons?"

NOT Blown Away

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.