House Republicans say Michigan’s main economic development agency has “failed taxpayers,” proposing new legislation to abolish the MEDC and replace it with broader business tax relief.
LANSING, Mich. (WZMQ) – House Republicans are calling Michigan’s main business incentive agency a “failed experiment” and are introducing new legislation that would abolish the Michigan Economic Development Corporation (MEDC). They say the MEDC has wasted billions in taxpayer money without delivering on job creation promises.
The two-bill package would dissolve the MEDC and prevent the Michigan Strategic Fund from making new economic development deals. Lawmakers behind the plan argue that instead of offering selective subsidies to major corporations, the state should focus on broad tax relief and cutting regulations to support all businesses.
“The writing on the wall is clear that what the state of Michigan is doing to invest in corporate giveaways is not working,” said Rep. Steve Carra (R-Three Rivers).
A 2020 study by the Mackinac Center for Public Policy found that between 2000 and 2020, only one in eleven jobs promised through MEDC-backed projects were ever realized, a success rate of roughly nine percent.
Carra, who chairs the House Oversight Subcommittee on Corporate Subsidies and State Investments, said Michigan should move away from “picking winners and losers” in the private sector.
“I believe in less rules, regulations, taxes, fines, and fees, a business-friendly environment where everybody can thrive,” Carra said. “The free market is the best regulator.”
Rep. Jay DeBoyer (R-Clay Township), who chairs the full House Oversight Committee, said the agency’s transparency problems have only deepened public mistrust.
“When the attorney general has raided the MEDC office, and then the State Administrative Board comes together, has a four-minute meeting, no information, and eliminates the position of the chief compliance officer, it really doesn’t look very good,” DeBoyer said.
The lawmakers say existing contracts would remain in place, but no new corporate subsidies would be offered if their proposal becomes law. They have not yet introduced a formal plan for what would replace the MEDC, but say it’s a legislative priority before the end of the year.
