LANSING – State Representatives Lisa Brown (D-West Bloomfield), Vicki Barnett (D-Farmington Hills) and Ellen Cogen Lipton (D-Huntington Woods) today voted for the Corporate Responsibility Act – a package of bills to help ensure that taxpayers' dollars are used wisely to create jobs and increase transparency and accountability in the awarding of state economic development incentives. The plan, which cleared the House today, includes mandatory criminal background checks on those applying for incentives in order to prevent the abuse of state tax credits like the recent awarding of a $9.1 million economic development incentive to a convicted felon.
"Economic incentives are proven job creators, but there needs to be transparency to ensure that they go to the right people and businesses," Brown said. "In these tough economic times, there must be more accountability with government spending. Our residents deserve to have their tax dollars spent wisely to help create jobs and improve our communities, not handed out to con artists."
Under the Corporate Responsibility Act, recipients of state economic development incentives will be required to undergo mandatory criminal background checks before the state can approve them. This includes every officer, director, managerial employee and any person who holds a 20 percent interest in the company that is applying.
"Government has an obligation to use taxpayer dollars wisely," Barnett said. "It's unbelievable that the state could issue millions of dollars in tax incentives without looking into who's receiving the money. We must have stringent standards in place to ensure that when tax dollars are spent they are going to responsible businesses committed to creating jobs for Michigan workers. This plan will bring accountability to government and ensure that people receiving tax incentives have had a thorough background check."
The package of bills will also help ensure that these taxpayer dollars produce their intended result of creating Michigan jobs for Michigan workers. When awarding contracts, the Department of Technology, Management and Budget will be required to consider whether applicants will provide goods or services from outside of Michigan or the United States. Recipients also must disclose where the work – including any work done by subcontractors – will be completed and where their call or contact center is located, if they have one.
The Michigan State Police are currently investigating the $9.1 million state tax incentive awarded last week to Richard Short – a Flint resident who has been convicted of fraud in Genesee, Oakland and Muskegon counties and served prison time. Short was awarded the Michigan Economic Growth Authority (MEGA) tax incentive for his new company, RASCO.
"People often go through extensive background checks for jobs, so it only makes sense that they should receive proper scrutiny to get millions of dollars in tax breaks from the state," Lipton said. "This plan will help ensure that state incentives go to companies that will use them to create jobs and help Michigan break out of this economic rut."
