Last week's approval of a host of deals tied to Fiat Chrysler Automobiles' plans for new plants in Southeast Michigan will be an economic win for the region, but for open government, they were a slow-rolling disaster.
In a choreographed meeting, the Detroit City Council and Michigan Strategic Fund board approved incentives, land swaps and loans totaling up to $319 million on Tuesday. The strategic fund moved its meeting to the afternoon to allow the City Council to vote first, even though the city incentives didn't need to be approved first.
Even more unusual, the MSF kept all details of the incentives package it was voting on from the public and media before even voting.
Normal practice is to share those details with media in advance of the meeting — though still secret from the public at large until after the vote. Not the most transparent practice, but at least someone is watching the henhouse.
In addition, if you wanted to find a top-line number for the total public assistance the FCA projects would receive, you'd better get out your calculator and be prepared to sift through a bunch of paperwork. Nobody is required to give such a number. (But you can see the math here: https://bit.ly/2YMmeIM)
The whole business highlights a transparency problem in Michigan's economic development practices. Getting details on the real costs of incentives granted years ago is essentially impossible. We know that incentives to the automakers granted under the old Michigan Economic Growth Authority system total in the billions, but it's hard to get much more specific than that — because the details of those incentives are kept secret. The Michigan Economic Development Corp. won't release them.
It's a question that's very relevant at a time when Michigan is searching for a way to pay for better roads, and so many other expensive infrastructure needs that have become crises because of stagnant tax collections.
And the need for disclosure goes beyond Michigan in that FCA is a publicly traded company with investors who should be able to find out if this massive investment is worth the risk. FCA shareholders could rightfully question such a grand plan for economically downtrodden Detroit unless they knew what kind of government support the plan is getting. Furthermore, the business of economic development is national in scope. The auto industry should have access to reliable public information about state and local incentives in order to make more informed decisions about where to invest capital.
Certainly, tax incentives aren't a zero-sum game, and in many ways are table stakes when it comes to business attraction — you can't play if you don't offer them.
But the public should at least know what the cost will be up front — before anybody votes — and receive an accounting of the real taxpayer cost of individual incentives. While we're at it, the public should also get an accounting of the taxpayer benefits of businesses that received incentives — new payroll and property tax collections and a current accounting of jobs created for each company each year for the life of the incentive.
Then we'd have a much better idea of whether we're getting a good deal.