UP Gazette

While the state of Michigan shows some transparency in terms of where taxpayer money goes, the Mackinac Center for Public Policy says it could do a better job.

Michigan offers money to business owners as an incentive to create jobs, but James Hohman of the Mackinac Centers says that the state’s programs are ineffective and unfair. 

“While these business subsidy programs are ineffective at their declared task, unfair to companies that don’t get them and expensive to the taxpayer, lawmakers feel the need to keep them around,” said Hohman, fiscal policy director at the Mackinac Center.

James Hohman, Mackinac Center | Twitter

There’s room for improvement in what the state tells people regarding these programs, Hohman said. There is an annual report, minutes of board meetings and informational briefings that anyone can access online, but he says lawmakers can do more, like telling people who will receive assistance before the deal is closed.

“This helps those who might be opposed to a deal to know that it’s coming and tell board members why they may have an issue with what the state offers. Other states provide this information — it’s part of regular board meeting notices in Delaware, for instance,” Hohman said, according to the Mackinac Center.

Depending on the age of the program, Michigan's record is mixed when it comes to what the public knows after a subsidy is given to a company. The newer programs have a better record of reporting what taxpayers are paying these companies for. The problem comes with the older programs, like the refundable tax credit program, through which companies receive their funding.   

In 2009, the details of these tax credits were removed from the domain of public information. Hohman said that the state should be more open about the program, which takes $5.3 billion from taxpayers for companies that receive the tax credits. In fact, other states currently disclose this information.

Michigan Legislators have bills in the works to improve accountability in the state’s programs, focusing on economic development, and maybe in 2021 change will come.