Traverse City Record-Eagle

September 25, 2013

Misleading report highlights high cost of jobs program


Traverse City Record-Eagle

---- — So pretend for a minute that the state agency that oversees welfare, for instance, reported to the Legislature that 12 groups that got $64 million to meet 1,746 goals had a 75 percent success rate.

Then say it turns out the agency was not telling the truth, and that the groups that got all that money had reached only 19 percent of those goals and one of them had actually gone belly-up.

Then, just for yuks, say that the agency in question called the whole thing an “oversight.” Imagine the reaction in the House and Senate; at the least, a call for heads on a platter would be expected.

That’s the real-life situation the Michigan Strategic Fund finds itself in, as reported Tuesday by the Detroit Free Press.

On April 1 (that could have been a giveaway) the Legislature was told by Auditor General Thomas McTavish that 12 firms that received grants under the 21st Century Job Trust Fund’s Centers of Energy Excellence Program created 75 percent of the 1,746 jobs they promised when they applied for the grants.

In fact, those companies (not counting one that went bankrupt), actually created only 19 percent of the jobs they promised, the Free Press report said. That’s 331 jobs, not the 1,309 claimed, and more than $193,000 per job.

It turns out the Michigan Strategic Fund is administered by the Michigan Economic Development Corp., the same crowd that hijacked the Pure Michigan ad campaign in January when it took out a full-page ad in the Wall Street Journal to tout Michigan as the latest state to adopt right-to-work legislation.

At the time, Gov. Rick Snyder said he thought using the wildly successful Pure Michigan brand to push a political agenda like Right to Work was wrong, and would not be repeated. This time, the MEDC, through the Strategic Fund, said the misleading report to the Legislature was “an oversight.”

It can be argued that giving away $64 million to create a paltry 1,746 jobs (even if it was 100 percent successful that would be more than $36,000 per job) as the Legislature threatens to make welfare recipients do public service work is totally out of whack.

While many states use incentives to boost their economies, that doesn’t mean it’s sound or equitable public policy.

If that’s the strategy the Legislature and the Snyder administration have decided on. so be it. But they are also obligated to make that strategy work and tell the truth when it doesn’t. This is another black mark against the MEDC; how many does it get?