Jennifer Granholm: Michigan shouldn't abandon tax credits despite embezzler's scam
Faced with a swarm of criticism this week after the Michigan Economic Development Corp. awarded tax credits to a company led by a convicted embezzler, Gov. Jennifer Granholm today defended the state’s tax incentives strategy at an appearance in the Ann Arbor region.
Granholm, visiting the Scio Township-based subsidiaries of medical device success story Terumo, said Terumo was an example of companies that benefit from tax incentives. Terumo received in 2008 a 7-year, $855,000 tax credit to support its expansion plan, and the firm has since hired more than 60 employees.
“We wouldn’t be able to do this or celebrate this if it wouldn’t be for the tool of these MEGA economic grants,” she said.
Her comments came after the MEDC awarded a $9.1 million tax credit on Tuesday to convicted fraud artist Richard Short’s RASCO Corp., which had promised to create 765 jobs in Flint. The incentives - which are not awarded until workers are hired - have since been rescinded, but the state Legislature is now investigating the incident.
“This has never happened before,” Granholm said. “We’ve got to double down the process and make sure it doesn’t happen again, but we can’t abandon our efforts to diversify Michigan’s economy.”
Granholm argued that the incentives are vital to the state’s revitalization.
“This is an example of why it’s important for there to be a public-private partnership in ensuring there’s a good business case for businesses to grow,” she said.
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Comments
Truth Seeker
Sun, Mar 21, 2010 : 2:01 p.m.
Speaking of having to pay and having to deceive the current administration for any consideration of new ideas, and any hope of getting tax credits, did any of you know that to even have an idea considered by the MEDC, for a 2008 21st Century "Jobs" Grant, individuals and companies were required to pay $500? Talk about "pay to play"! Michigan is the only state in the nation to have EVER REQUIRED such a payment - up front - for consideration of entrepreneurial ideas. And we wonder why we are LAST in the nation in just about everything except misery!
thurber
Fri, Mar 19, 2010 : 5:34 p.m.
Democrats in government are suited for doling out other people's money but typically lack the DNA to know what a real business looks and smells like.
Truth Seeker
Fri, Mar 19, 2010 : 4:51 p.m.
By the way... how many jobs were created by with $130M+ spent on Granholm's (and the MEDC's) much hyped 21st Century "Jobs" Fund?? How many companies that got some of this money are still in business? How many universities that got some of this money actually created NEW jobs? Does anyone know the answers? Maybe someone at AnnArbor.com? Anyone???
Truth Seeker
Fri, Mar 19, 2010 : 4:44 p.m.
Regarding the Governor's latest "bizarre" support of a convicted embezzler and felon in getting $9.1M in tax credits for a - supposed - alternative energy company, I will be contacting Rep. Tom McMillin and members of the media regarding my efforts to just get the Governor and her staff to tell me what happened to my letter of May 2006 which disclosed a truly new and innovative alternative energy technology (now undergoing testing), which was developed by my company, here in Michigan. I never received a reply to this letter and disclosure (which contained some privileged info and took three days to prepare), nor an explanation for what happened to it. I never got so much as a thank you note (much less, offers of a tax credit). We were so offended that we didn't even receive any response or even a referral that we chose to look to other states and countries for help in developing this promising technology (and the jobs that will go with it). Fortunately, it now appears highly likely that we will receive some financial assistance from another state (who's economic problems are at least as bad as those of Michigan), even though we do not even reside there (yet)! I believe BOTH of these incidents are scandals that need to be further investigated. Why should some outside companies, who are mainly good at "B.S.", get millions in taxpayer support, while other, truly innovative companies, based within our own state, not even get the time of day from this Governor? Why are companies not LEGALLY required to actually create the number jobs they claim they will create, in exchange for tax credits (and "claw back" any credits they get if they don't create this number of jobs)? I voted for Granholm in her first term, but now I believe she was a complete disaster for our state and she has set our economic health back at least 8 years! P.S. I guess if your communication doesn't come with a check, nobody in government gives a damn. "
Karen Sidney
Fri, Mar 19, 2010 : 4:41 p.m.
If anyone has information on possible public corruption, they should submit it to the FBI tip line https://tips.fbi.gov/ My understanding is that the local field office based in Detroit has made investigation of public corruption a priority.
llspier
Fri, Mar 19, 2010 : 2:30 p.m.
If this were an isolated incident of 'crony capitalism', it might be forgiven as an honest mistake. This deal pales compared to the amounts of money, tax breaks and special deals put into the Sovereign Deed scam at Pellston Airport, however. Not familiar with that one? Search Pellston +Sovereign Deed and you'll get an eye-full. Even worse, the Feds just dumped another huge pot of money on this bunch! All for an airport that gets about one plane a day...last count, $15 million and rising... Face it, we're looking at corruption - big corruption - among state politicians. Time to clean house!
Top Cat
Fri, Mar 19, 2010 : 12:46 p.m.
These tax credits are what's called crony capitalism. They are a tool for government to pick favorites for special benefits at the expense of all of us. While any one example can be held up as a success story, the real issue and sole issue is, how is business doing in general and are jobs being created for our people. For that, we know the answer. It will take more than photo ops to blur that.
Michisbest
Fri, Mar 19, 2010 : 12:32 p.m.
Maybe she can hire Monica and John Conyers to run the MEDC they know how to scam without getting caught then when they do the Taxpayers have to pay thier bills. And we want the government managing health care dollars?
maddcow
Fri, Mar 19, 2010 : 12:24 p.m.
Isn't that great!! The state can give 9.5 million to a co artist but poor people can't get a $4 perscription, Thanks Jenny!!!! By the way what does we have to double down mean anyway. Do you want to give 19m? your a worthless governor and a lousy human being!!