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 The incentives - which are not awarded until workers are hired - have since been rescinded, but the state Legislature is now investigating the incident.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.
Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or email@example.com or follow him on Twitter. You can also subscribe to AnnArbor.com Business Review's weekly e-newsletter or the upcoming breaking business news e-newsletter.