LANSING, Mich. (Michigan News Source) – The Michigan House Republicans introduced legislation to abolish the state agency that hands out subsidies to select businesses.
“A proven record of failure.”
State Rep. Steve Carra (R-Three Rivers) and State Rep. Jay DeBoyer (R-Clay Township) introduced two bills that would abolish the Michigan Economic Development Corporation (MEDC). The MEDC spent $94 million in 2024.
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Free market advocates have criticized the MEDC for years because of the subsidies it hands out to favored businesses. There have been numerous reports over the past two decades that question the effectiveness of the grants dispensed by the MEDC in terms of creating jobs. For example, the Office of the Auditor General released a report in 2013 that showed only 19% of projected jobs in MEDC-subsidized businesses actually came to fruition.
“The MEDC has a proven record of failure,” said Carra. “It’s time to give up on this flawed idea that government bureaucrats can pick winners better than the free market. Instead of providing corporate subsidies to a few politically well-connected companies and raising taxes on everyone else to pay for it, we should lower taxes for everyone and create a business-friendly environment by cutting unnecessary regulations.”
Who benefits?
The biggest benefactors of the MEDC’s subsidies have been the auto companies GM and Ford.
Supporters of the MEDC say that subsidies are vital to attracting new businesses to the state in an ultra competitive national landscape. Michigan Gov. Gretchen Whitmer is a big advocate of the MEDC deals that she claims brings more jobs to the state.
Possible corruption.
The MEDC is making headlines for the wrong reasons in 2025.
In June, Michigan Attorney General Dana Nessel’s office executed search warrants at the MEDC office and a residence involving a long-term investigation into the misuse of MEDC funds.
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The controversy revolves around a $20 million MEDC grant under Gov. Gretchen Whitmer that also involves MEDC CEO Quentin Messer and Democrat donor Fay Beydoun. The MEDC awarded the $20 million grant to a nonprofit. Except, Beydoun’s nonprofit Global Link International did not exist when the $20 million was appropriated, according to Michigan Forward. Beydoun allegedly spent the money on questionable items. After pressure mounted, Beydoun repaid the unspent portion of the grant.
The MEDC declared in October that the China-based Gotion High-Tech Co. was in default of a 2022 grant. The MEDC suspended subsidies to the project and is trying to get back $23.7 million already spent.
