Latest news with #SteveCarra
Yahoo
22-05-2025
- Business
- Yahoo
Michigan House subcommittee interrogates economic development deals as companies fail to deliver
Rep. Steve Carra (R-Three Rivers), chair of the House Oversight Subcommittee on Corporate Subsidies and State Investments on May 21, 2025 | Kyle Davidson As Michigan Republicans continue to take a magnifying glass to economic development spending, the House Oversight Subcommittee on Corporate Subsidies and State Investments invited James Hohman of the free-market Mackinac Center for Public Policy to offer his analysis of the state's Strategic Outreach and Attraction Reserve (SOAR) Fund. Hohman, who serves as the Mackinac Center's director of Fiscal Policy, walked committee members through a collection of several projects through the state's critical industries program, comparing the number of jobs promised with the jobs delivered. As he broke down each agreement, Hohman repeatedly noted that these deals were structured to deliver short-term payoffs for companies, and were not tied to job creation, with many deals tying the bulk of their funding requirements to a company's capital expenditures, or money a company spends to buy, maintain or improve their assets. Additionally, not all deals move forward, with Hohman pointing to a $100.8 million dollar deal with Ford made in 2022 as an example. Hohman urged lawmakers and members of the public to bring more skepticism to these deals, noting they often fail to deliver on their promises. 'There's a massive difference between what gets announced and what actually happens when it comes to living up to expectations,' Hohman said. 'A lot of them wind up with no jobs at all. Some of them do meet [or] exceed expectations, but when you look at the rhetoric behind the deals, when they're getting made, there's rarely even an acknowledgement that deals might not deliver on their pledges,' Hohman said. If companies fail to create the jobs they promised, the state has to wait years before it can ask for its money back, Hohman said. If they eliminate jobs after the deal concludes, the state has no way of getting its money back, he said. Additionally when asked about the level of transparency offered into these deals, Hohman said they were meeting the minimum standard of transparency, publishing an annual report on how much money was offered, how much the company received and whether they created the jobs that were announced. However, the report's schedule leaves the status of most current projects unknown, while sometimes forcing people to wait 18 months to learn an agreement didn't move forward. Overall the state has allocated $1.46 billion in taxpayer funds to create 14,779 jobs, Hohman said. While lawmakers clearly had ambitious plans for the program, those goals have not panned out, he said. And while the companies receiving this funding will likely create jobs to fill the buildings they've built using state funding, the number of jobs they create will depend on an uncertain future, Hohman said. 'My major takeaway for you is that if you're going to continue operating the critical industry program, more of the deal needs to be based on actual job creation. When you have deals that consistently fall apart, that fail to deliver, you should not be paying them until they finally do the things they're obligated or that lawmakers expect them to do,' Hohman said. This would not require a change to the law, Hohman said, only a change in expectations for lawmakers, asking them not to approve projects based on capital expenditures rather than job creation. While there are a number of areas where the Mackinac Center believes these dollars could better benefit residents, Hohman offered his support for House Republicans' road funding plan, which draws the bulk of its funding by reallocating or eliminating funding set aside for economic development, including $500 million set for automatic deposits into the SOAR fund. Despite the issues with the program, State Rep. Laurie Pohutsky (D-Livonia) raised repeated concerns about ensuring criticism of the program was accurate. While some press releases may be disingenuous in promising to deliver jobs, SOAR funding that is allocated for site readiness should not be expected to create jobs. 'You can't put 2,000 jobs in a site that is not ready for 2,000 jobs,' Pohutsky said. While the SOAR program is not the best use of the state's money, there are enough flaws that are not based around promises made in press releases, she said. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
31-01-2025
- Business
- Yahoo
Bipartisan Michigan lawmakers unveil bills to prohibit legislative non-disclosure agreements
Rep. Steve Carra on Feb. 24, 2024 | Anna Liz Nichols A bipartisan effort to prohibit legislators from entering into non-disclosure agreements (NDAs) was unveiled on Thursday by state Reps. Steve Carra (R-Three Rivers) and Dylan Wegela (D-Garden City). HB 4052 and HB 4053 would prevent lawmakers from entering into NDAs based on information they obtained in their official capacity, an issue that has become a political football over the past several years. 'Elected officials have a duty to be as open and transparent as possible,' said Carra. 'Lawmakers should not trade their silence for information or proximity, using this underhanded tool for the practice of developing corporate welfare schemes. Corruption like this has a proven track record of failure, but the real insidiousness comes from the practice being set up to, primarily and directly, benefit the politically connected.' Updated: Legislature passes sweeping business incentive bills, some lawmakers sign NDAs Although the bills are bipartisan, it's unclear what their fate will be in this legislative term with a GOP-controlled House and a Democratic-led Senate. The legislation has been referred to the House Government Operations Committee, where bills historically have gone to die, although House Speaker Matt Hall (R-Richland Twp.) said Thursday that legislation will move from that committee this term. In late 2021, lawmakers seeking to create incentives for businesses to move to Michigan signed non-disclosure agreements, which followed GOP criticism amid reports earlier that year that the Democratic Gov. Gretchen Whitmer administration used confidentiality agreements in severance agreements with top officials like former Department of Health and Human Services (DHHS) Director Robert Gordon. More recently, the issue became a campaign talking point last year concerning the proposed electric vehicle battery plant in Mecosta County owned by Gotion Inc., the U.S.-owned subsidiary of Chinese battery manufacturer Gotion, which received more than $700 million in state tax incentives. Both then-U.S. Rep. Elissa Slotkin (D-Holly) and former U.S. Rep. Curtis Hertel (D-East Lansing) were accused of signing NDAs with Gotion, although reporting by The Detroit News found both had actually signed those agreements with the Michigan Economic Development Corp. (MEDC), a quasi-governmental institution. Reporting also indicated that among state lawmakers who signed NDAs regarding economic development were several prominent Republicans, including Hall, former House Speaker Jason Wentworth (R-Farwell) and former Senate Majority Leader Mike Shirkey (R-Clarklake), as well as top Democrats, including former House Speaker Joe Tate (D-Detroit) and former Senate Minority Leader Jim Ananich (D-Flint). HB 4052, sponsored by Carra, would ban legislators from agreeing not to publicly disclose information pertaining to their duties as legislators. HB 4053, sponsored by Wegela, would establish the definition of an NDA for that purpose. 'Members of both parties, in both chambers, have signed these agreements to keep the development of these projects secret,' said Wegela. 'The signing of these NDAs has led to the transfer of billions of taxpayer dollars to corporations. Lawmakers learn about these agreements and regardless of whether or not they support the projects, it prevents them from speaking out against these deals. Legislators shouldn't be handcuffed by NDAs preventing them from speaking out against deals that are bad for Michigan.' While the bills wouldn't cover legislative staffers, Wegela said he was willing to expand the proposals' reach. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
