News Story

MEDC Questioned About Its Transparency

Questions about how tax dollars spent could warrant new legislation

In the spring of 2011, Rep. Bob Genetski, R-Saugatuck, asked the Michigan Economic Development Corp. for a copy of the Travel Michigan budget. On June 13, 2011, MEDC sent him a document that was supposedly the information he'd requested.

It wasn't what Rep. Genetski expected.

"It was a very general list consisting mostly of big money ad buys for Pure Michigan," Rep. Genetski said. "I've seen more details in 5th graders' reports."

Rep. Genetski, a member of the House Appropriations Committee, said that for several months he tried to get more budget details. Now, a year and a half later, Rep. Genetski says he still hasn't seen anything that looks like a detailed Travel Michigan budget.

"I've never really gotten what I was after," he said. "Usually when I ask for budget information from departments, they hand over a lot more information. Often their details get right down to the costs of supplies."

The MEDC describes itself as "a public-private partnership serving as the state's marketing arm and lead agency for business, talent, and jobs, tourism, film and digital  incentives, arts and cultural grants, and overall economic growth."

One of the most recognized of the MEDC's responsibilities is Pure Michigan. Travel Michigan (now Pure Michigan Travel) is where prospective tourists can get information about destinations, events, and other things going on in Michigan.

The MEDC website also has a section on transparency, but Rep. Genetski and others say the MEDC often doesn't fulfill that mission.

Rep. Genetski said the fact that the MEDC is a quasi-government agency, could be a factor in its apparent lack of transparency.

"It seems like when they want appropriations, they're a government agency," he said. "But when someone wants information, suddenly they're private."

Officials from the MEDC did not respond to requests for comment.

The agency was created in 1999 under the administration of Gov. John Engler and transparency questions existed then. During the administration of Gov. Jennifer Granholm, questions of transparency at MEDC reached a zenith. The MEDC promoted tax credits that it claimed created hundreds, or at times thousands, of jobs, but when asked how many of those jobs actually materialized, the agency's responses were usually murky and complicated.

In the final years of the Granholm administration, the credibility of the job creation claims came under fire. Lawmakers on both sides of the aisle and members of the news media openly questioned the value of MEDC claims.

When the administration of Gov. Rick Snyder came to office, it was aware of the transparency issues at the MEDC. A key part of the effort to be more transparent was to make tax credits subject to the legislative process. The idea was that, if the MEDC had to justify its projects to the legislature, transparency would become a necessity.

It appears that the effort was only partly successful.

"I really haven't done much that has involved the MEDC," said Rep. Tom McMillin, R-Rochester Hills, who is chair of the House Oversight, Reforms and Ethics Committee. "I just assumed that after Gov. Snyder came in and made the changes they (MEDC officials) were transparent.

"If that's not the case, then maybe we need some legislation," Rep. McMillin said.

Rep. Mike Shirkey, R-Clark Lake, said he has introduced amendments in the House Commerce Committee that would require more transparency at the MEDC.

"Every time their (MEDC's) bills come up and I introduce an amendment to increase their transparency, MEDC wants it to be watered down," Rep. Shirkey said. "I believe their intentions are good. However, for an organization that gets a fair amount of taxpayer dollars, they just don't have enough transparency."

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.