(The Center Square) – As bipartisan calls to abolish the Michigan Economic Development Corp. grow, state Sen. Thomas Albert, says it is time to revisit his legislative plan to dismantle the agency and overhaul Michigan’s approach to economic development.
Albert, R-Lowell, introduced a 53-bill package nearly a year ago that would eliminate the MEDC and the Michigan Strategic Fund.
Under the package, some of the existing programs would be shifted to a new Bureau of Fair Competition and Free Enterprise within the Michigan Department of Labor and Economic Opportunity.
Albert told The Center Square in an exclusive interview that recent renewed scrutiny of MEDC-administered grants and Michigan Attorney General Dana Nessel joining calls to abolish the agency underscore the need for the changes he proposed.
“It’s interesting to find a topic where both sides of the aisle are in agreement that something’s broken,” Albert said.
He said gubernatorial candidates from both parties calling for MEDC reforms reflect a rare moment of bipartisan agreement in Michigan politics.
“MEDC has actually proved a unifying factor in the state of Michigan in a lot of respects, which is indicative of something that just doesn't work,” Albert said. “Eventually, you have to realize the car is totaled. It's time to stop trying to fix it up.”
Recent allegations report that more than $1 million of a $3.4 million MEDC-administered grant awarded to the American Arab Chamber of Commerce went missing. The Michigan Attorney General’s Office is coordinating with the FBI on the investigation, as previously reported by The Center Square.
The allegations add to longstanding concerns surrounding MEDC, which in recent years have centered on Fay Beydoun.
In that case, the Whitmer ally and donor is facing 16 felonies tied to the alleged misuse of a $20 million state grant awarded to her nonprofit, Global Link International.
For Albert, these cases are just further evidence that the problems at MEDC extend beyond individual grants or recipients.
“If you look at the investments they've made, they've been in disaster,” he said. “I actually worked at the state pension fund as an investor before serving in the legislature, and if I would have made these investments, I would have been fired. But since it's not their money, no one's really ever held accountable.”
The corporation, which is a taxpayer-funded economic development agency founded in 1999, has administered billions of dollars in state incentives, grants and other economic development funding.
Quentin L. Messer Jr., the CEO of MEDC, wrote an op-ed in July in response to concerns over economic development in Michigan. In that article, Messer defended the corporation’s work.
“Some projects don’t turn out as we hoped. The marketplace has never been 100% clairvoyant. Incentives recommended by the MEDC are milestone-metered and performance-based. In other words: state funding is only provided once performance milestones are met,” he said. While some might wish to live in a world without government intervention in the markets, the reality is that Michigan competes every day against other intervening governments . . . While work remains and I acknowledge the need for continuous improvement, the MEDC accepts the challenge of working with businesses to deliver jobs and entrepreneurial opportunities that underpin a strong state economy for all.”
Albert pushed back on those claims, explaining how Michigan has spent years attempting to drive economic development through government-directed incentives with little progress.
“We’ve been trying to find ways to do economic development through corporate welfare in Michigan for decades, and it just doesn’t work,” Albert said. “So we have to put our trust back in free enterprise. “That’s the path forward that will bring growth back to Michigan.”
Albert’s legislation would eliminate the MEDC, Michigan Strategic Fund, Strategic Outreach and Attraction Reserve Fund, Strategic Site Readiness Program, Michigan Film and Digital Media Office and other programs. Funding dedicated to the MEDC and Michigan Strategic Fund would then be returned to the state’s general fund.
The legislation would also establish an independent Office of the Chief Compliance Officer to oversee economic development funding and help prevent illegal or unethical conduct.
Albert’s proposal has yet to see movement, which he says will likely continue to be the case with Democrats controlling the state Senate.
“Democrats, as a whole, want to do corporate welfare better. They largely don't see that this is just inherently flawed and centralized planning doesn't work,” he said. “I really do think we would need a Republican majority to make the changes that are really needed to put an end to the MEDC and move to policies that actually work.”
Still, Albert said he would not rule out bipartisan movement, especially as more Democrats join the calls to abolish MEDC.
“You never know,” he said. “Maybe they put forth a proposal and they were like, ‘We’ll do some of your stuff, some of mine.’ I don’t want to close the door on that.”
Albert argued that it is time for Michigan to abandon its current approach attempt at taxpayer-funded economic development.
“We've gone down this road far enough to see this isn't working. We need to just focus on free enterprise. We need to make our taxes competitive again, especially with the Midwest region. We need to have a regulatory structure that makes people want to grow here, makes people want to invest here,” he said. “This picking winners and losers through corporate welfare, just doesn't work. So, why don't we focus on what we know that does work?”
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