Downriver Today

According to the Mackinac Center for Public Policy, Michigan lawmakers should be more transparent when deciding how to distribute taxpayer money to select businesses.

The state offers business subsidy to select businesses in an effort to create jobs and boost the economy. The public should know who is going to get state assistance before the deal is approved, according to the Center.

The state does currently disclose some information about what it offers companies. It releases an annual report that shows all the deals it’s made that year and board meeting minutes and extra informational briefings is available to the public online. These are useful at telling people what has been proposed, but there is room for improvement. There are currently some proposals in the Legislature for added transparency.

These are useful at telling people what has been proposed, but there is room for improvement. For instance, thepublic should know who is going to get state assistance before the deal is approved. This would inform those who might be opposed to a deal and give them the opportunity to let board members know what issues they may have with what the state offers. This is already common practice in other states.

There is also room for improvement when it comes to disclosing information on what happens after a subsidy gets awarded. The state’s newer programs adequately report what companies collect from taxpayers, but not so with its older programs, where companies receive their payments through refundable tax credit.

Information on the details of tax credits used to be available to the public, but lawmakers changed this in 2009. Lawmakers should change it back to the way it was before. Companies will collect $5.3 billion in taxpayer provided funds through this program, and people should be able to know where their money is going. At least 18 other states already make this information available to taxpayers either through annual reports or making the information available online and Michigan should as well.

There should be extra transparency and accountability for when deals don’t go as expected. Some companies don’t hold up their end of the bargain and don’t create the jobs they pledged to create. When these deals go wrong, the money should go back to lawmakers to re-budget, instead of going back to the hands of administrators, who can use it to issue more deals.

A bipartisan sponsored package of deals including these changes among others has been proposed to improve accountability and transparency in the state’s economic development programs.