(The Center Square) – Michigan Republicans have proposed legislation to abolish the Michigan Economic Development Corp.
This follows months of controversy and ongoing calls from Republican lawmakers in the state for its end.
State Reps. Steve Carra and Jay DeBoyer proposed bills in the state House last week.
House Bill 5243 would amend the Michigan Strategic Fund Act to abolish the MEDC. House Bill 5244 prohibits the state or any of its agencies from entering into an agreement with local governments for the purpose of “economic development.”
“From abuse and misuse with multi-million-dollar grants to greenlighting taxpayer-funded corporate giveaways that vastly underdeliver, the MEDC has failed this state and the residents and communities it represents,” DeBoyer, R-Clay Township, said. “This is past repudiation or repair. It is time to fundamentally start over and go forward with methods of economic development that are forthright, efficient, and truly provide return on tax dollars. What we have seen from MEDC should not and cannot be the status quo in state government.”
In addition to the House plan, Sen. Thomas Albert, R-Lowell, also introduced a 53-bill package to eliminate MEDC and “reshape the state’s approach to job creation.”
“It’s time to shut down the MEDC, retain only those programs with a proven track record, and ensure decision-making for taxpayer-funded projects has accountability,” Albert said.
MEDC is Michigan’s main taxpayer-funded agency that looks to subsidize business growth and job creation through different programs.
Yet, there are disputes about how effective it actually is. A recent study from the Mackinac Center for Public Policy found that, from 2000 to 2020, only one out of every 11 jobs announced in major state-sponsored deals actually materialized. That means, while MEDC spent billions for a promised 123,060 jobs, the study found that only 10,889 were actually created.
In July, Carra spoke with The Center Square in an exclusive interview about his concerns surrounding MEDC.
“The current system is a complete failure, a wealth destroyer for the hardworking middle class, and a crooked scheme benefiting the rich and politically connected,” Carra, R-Three Rivers, said at that time. “The MEDC should be abolished.”
He followed those threats through with action, stating last week that it should be the free market not government bureaucrats that decide winners and losers.
“Instead of providing corporate subsidies to a few politically well-connected companies and raising taxes on everyone else to pay for it, we should lower taxes for everyone and create a business-friendly environment by cutting unnecessary regulations,” Carra said.
MEDC is currently embroiled in a number of controversies, one which broke after a Whitmer political appointee and donor was set to receive $20 million of taxpayer funding for her Oakland County-based nonprofit. Other questionable expenditures include a $4,500 coffee maker.
Some Democrats have joined Republicans in expressing concern about MEDC’s operations, though not going as far as calling for its abolishment. Michigan Attorney General Dana Nessel, a Democrat, said in August that she is “deeply concerned” about some of the agency’s actions.
So far, the bills are waiting to be taken up in committee.
