Wednesday, December 22, 2010

Michigan Ranks 7th Nationwide in Online Transparency of Taxpayer-backed Business Incentives

The way that Nancy Cassis was running around with her hair on fire screaming about "transparency" all the time, you would think the state's economic development team was involved in some massive cover-up of epic proportions, lighting cigars with $100 bills as they boarded the taxpayer-funded yachts or something. No, it was just Nancy being annoying; turns out we are one of the best states in the nation when it comes to online disclosure of business tax incentives.

Michigan ranks seventh nationwide in online transparency of taxpayer-backed business incentives in a review of state government subsidies.

Washington, D.C.-based Good Jobs First this month released Show us the Subsidies, a report that evaluates online disclosure of jobs figures and economic results from state subsidies.

Michigan's "C-" score is based on information it provides online for Michigan's brownfield redevelopment credit program, film-tax incentives, Michigan Economic Growth Authority credits, advanced-battery credits and renaissance-zone program.

The highest grade in the report was a "B," given to Illinois, and lowest grade to Hawaii, which received a "D-." Consequently, Illinois is listed as most transparent, and Hawaii least transparent.

A grade of "F" was reserved for states that didn't provide any online reporting of subsidy programs

A C- sounds harsh, but it looks like the grading is pretty tough if the highest state was only a B. The Michigan report can be found here. Once legal boundaries are worked out, chances are "transparency" will keep getting better with time. Companies don't particularly want their financial information splashed out over the airwaves for competitive reasons, but as we come to some uniform disclosure methods across the country, it should get easier to do. Michigan already has a leg up on the others:

The Michigan Economic Development Corp. received kudos in the report for its interactive Web site, which allows users to map subsidy use by type of industry. The map displays reported numbers of jobs created, facility addresses and a link to project summaries.

Michigan is the only state in the country that provides such an interactive map, Good Jobs First reported.

The Web site can be viewed at

Governor Granholm signed Cassis' film credit transparency bills yesterday, and from the Michigan report it looks like the Film Office has been doing a good job, considering how this business has exploded since we expanded the credits just a few short years ago.

Film tax credits are disclosed in an annual report listed above. Points are awarded for including the award amount, the actual number of jobs created and covering all years since the program began. The 2009 report contains project names only and not company names, but company names can be found on the Michigan Film Office website at

Transparency is a good thing. Nothing wrong with it. But there is a fine line between honest communication to the taxpayers, and using the issue as a weapon to score political points. Something tells you that the time for political grandstanding on incentives has passed though, and starting next year, we will hear nothing but applause for how "transparent" we are. Call it a hunch.

Just remember where it started.