March 26, 2010

The following is an editorial written by State Representative Barb Byrum (D-Onondaga). If you have questions about this commentary, please contact Rep. Byrum's office by calling (517) 373-0587.

The struggles that we continue to face here in Michigan have been well documented. Too many Ingham County families are being squeezed, and struggling just to make ends meet. We need to do everything we can to jumpstart our economy and get people back to work. In order to do that, state government needs to do more – a lot more – to help grow and attract new businesses and encourage entrepreneurship. Sadly, as the recent awarding of a sizable tax incentive to a convicted felon proves, Lansing has a long way to go.

Our state uses a number of economic development tools to grow Michigan businesses and create jobs. Some of the most successful tools at our disposal are the tax incentives we offer to companies to help them expand their operations or set up shop here in Michigan. These incentives work to diversify our economy by bringing businesses in emerging industries to our state. However, we must make sure that when taxpayer dollars are used to create jobs, that these funds are being spent wisely and appropriately. That has not happened.

The Michigan Economic Growth Authority (MEGA) recently awarded a $9.1 million tax incentive to Richard Short – a Flint resident and con artist who has been convicted of fraud in Genesee, Oakland and Muskegon counties. The State Police are currently investigating how Short was awarded this grant for his new company, RASCO, which had promised to create 765 jobs in Flint within the next five years.

What is clear is that MEGA did not do its due diligence in examining RASCO's application. What is frustrating to me – and to you as well, I imagine – is how someone with such a history of scamming people could be awarded millions in taxpayer dollars. There needs to be much more transparency in this process, and accountability for those who award these tax credits. We need to get our fiscal house in order, and that first means eliminating waste and inefficiency in state government.

In order to ensure that our taxpayer dollars are protected, I recently voted for the Corporate Responsibility Act, which will require mandatory criminal background checks on those applying for state tax incentives. These background checks would include company officers, directors and managers, as well as persons with more than 20 percent interest in the company.

This plan will also help ensure that these tax incentives will actually go toward creating jobs for Michigan workers. The Department of Technology, Management and Budget will, when awarding these tax breaks, consider where the work will be completed, and whether applicants will provide goods and services from outside of Michigan or the United States.

At a time when Michigan families are being forced to tighten their belts to make ends meet, state government should follow suit and start treating every taxpayer dollar with the respect it deserves.  The Corporate Responsibility Act must be signed into law as soon as possible.