News Story

State’s '21st Century Jobs Fund' Spent $100 Million For Just 1,052 Jobs

‘…You’re going to be blown away’ promised previous governor about these subsidies

The state’s 21st Century Investment Fund (CIF) has spent nearly $100 million on various types of subsidies and other forms of involvement in businesses since 2006, yet only 1,052 jobs have been created or retained because of it, according to the fund’s 2015 report. In addition, some investment groups received millions through the fund but created zero jobs and no proceeds.

The state describes the fund as a program that “encourages the growth of emerging Michigan companies, diversifies the state’s economy by creating and retaining knowledge-based jobs and grows a community of investors to create a long-term, sustainable capital ecosystem within Michigan.” 

According to the report, $98.5 million in so-called “capital called for investments,” or money spent by the state, has been used for investments. 

 "In 2005, policymakers deluded themselves into putting tax money into high-risk investments to pump up the economy," said James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy. "Since then, there have been millions spent and little to show for it." 

A number of examples are cited.

Nth Power IV, which the report lists as a venture capital firm in Detroit, got $8.9 million of a $10 million commitment from the state and created $400,000 in proceeds and zero jobs. 

Microposite, a company that produced environmentally friendly siding products before going out of business in 2009, got $1.6 million from the state but created zero jobs. The state got back $55,737 in proceeds. 

Quad Partners II received $9.8 million of a $10 million commitment for private equity investment from the state, but the investment created zero proceeds for the state and zero jobs. 

Relativity I also created zero proceeds and zero jobs despite receiving $6.1 million from the state’s investment fund. 

Midwest Mezzanine IV got $9.6 million and $6.3 million was returned to the state, but zero jobs were created. 

Not all the investments have been failures. Arboretum II received $7.1 million for venture capital yet had $78 million in proceeds for the state and also created 49 jobs.  

Arboretum III got $8.3 million for venture capital investments and created 199 jobs, but the state only got back $200,000 in proceeds, according to the report. Pegasus Fund IV received $9.1 million, got zero back in proceeds, but created 250 jobs. 

The investment fund uses four different types of investments: venture capital investments, private equity investments, mezzanine investments, and direct investments.  

The program was created by the Public Act 225 in 2005 and was sponsored by former Rep. Bill Huizenga, R-Zeeland.  

The fund’s updated progress report including 2015-16 is being released today. The Michigan Economic Development Corporation did not respond to emails seeking comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

NAACP: Historical 13-Star Flag Associated With 'Racial Supremacy' Groups

Betsy Ross flag appropriated by 'Patriot Movement and other militia groups'

The president of the NAACP Greater Grand Rapids Branch said that students who brought a Donald Trump for president banner and a ‘Betsy Ross’ 13-star flag to a local high school football game were involved in “intentional actions of intimidation and rooted in no agenda other than to insult, to injure, and to incite.”

Cle J. Jackson, the president of the NAACP Greater Grand Rapids Branch, said the Betsy Ross 13-star flag has been appropriated by “the so-called ‘Patriot Movement’ and other militia groups who are responding to America’s increasing diversity with opposition and racial supremacy.”

At a Sept. 9 football game at Houseman Field between Forest Hills Center and Ottawa Hills, some students brought the Trump banner as well as the 13-star Betsy Ross flag. According to data collected by the state, in 2015-16, Forest Hills School District’s student population was 81 percent white while in Grand Rapids schools just 23 percent of the students are white.

Jackson made the statement Wednesday after a request from Michigan Capitol Confidential for comment.

“From Pennsylvania to Missouri, and other states and parts of Michigan, the ‘Field of Play’ activities that should be the home of sportsmanship have become home to racial taunts such as blackface, displays of nooses and now supposedly covert actions,” Jackson said in his statement. “Celebrating flags co-opted by exclusionary movements, held next to political banners of a presidential candidate who has offended people of color and immigrants, and accompanied by chants of ‘Go home’ by some students at a majority White school to players at a predominantly African-American school are not coincidences by unaware students. They are intentional actions of intimidation and rooted in no agenda other than to insult, to injure, and to incite.”

Jackson continued: “In the current sociopolitical environment, we are not surprised by such activities. At the same time, in keeping with our mission, we are not silent in the face of intimidation whether at the ballot box or the ballgame. We applaud our community, especially our young people -- of all races -- who did not react in any way expected. As we've always done, we stood our ground, and played our own game.”

Jackson compared the reactions to the event to responses to San Francisco 49ers’ quarterback Colin Kaepernick, who has refused to stand during the playing of the national anthem during NFL games saying he refuses to show pride in a country that “oppresses black people and people of color

“As a civil rights and advocacy organization, we also speak out against double-standards. Therefore, we clearly request that those in our community who dismiss this local incident while denigrating a football player who ‘takes a knee’ during the National Anthem to raise awareness of racial inequity, will recognize the bias preventing them from seeing hostility against young people of color,” Jackson said. “Left unchecked, those actions at the game may fuel tomorrow’s hiring, health care and law enforcement attitudes and decisions of the next generation coming from schools such as Forest Hills Central.”

Click here to see the NAACP’s full statement.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.