LANSING, Mich. — Sen. Lana Theis introduced legislation on Tuesday to improve state economic development programs by making them more fiscally responsible.
“For too long, taxpayer-funded corporate welfare programs have sounded better than they have worked,” said Theis, R-Brighton, who introduced Senate Bill 770. “The truth is, beyond the headlines and promises made in press releases, little is done to ensure taxpayers are getting a return on their investment in these business subsidy deals. State administrators must be stewards of our public resources, not simply cheerleaders about their successes. They must be upfront with the public about the deals that have not gone as planned.”
Theis’ bill is one in a 10-bill bipartisan and bicameral plan that would strengthen transparency and accountability measures for both state government and recipients of certain business tax credits and incentives.
SB 770 would require the Michigan Economic Development Corporation to post a notice on its website when a recipient of funds fails to meet the terms of a written agreement or requests to amend an agreement, and when a recipient ceases business operations.
Other bills in the plan would:
- Require the Michigan Strategic Fund (MSF) board to publicly share contract agreements, briefing memoranda and term sheets on its website 10 business days before it can approve a grant, award, tax credit, loan or other assistance.
- Restore public disclosure requirements for information related to an individual company’s receipt of MEGA (Michigan Economic Growth Authority) tax credits.
- Require an incentive be reduced proportionally if an economic development agreement is amended to reduce the amount of jobs that are to be created by a recipient.
- Transfer all funding that is returned because of a failed agreement to the state’s General Fund rather than to the MSF.
“This plan, and my bill, will help to protect taxpayers’ interests by holding government and those receiving taxpayer assistance more accountable for their action or inaction,” Theis said.
The Senate legislation was referred to the Economic and Small Business Development Committee for consideration.