A state program awarding 12 grants totaling $67 million in taxpayer dollars created only a third of the projected jobs.

The Centers of Energy Excellence (COEE) program was supposed to create 1,746 jobs by the end of 2012. Yet according to the latest 21st Century Jobs Fund Annual Report, only 588 of these jobs had been created as of February 29, 2012.

"The definition of insanity is having our state government continue to selectively fund areas of the private economy and be surprised that the outcomes aren’t good," said Wendy Day, president of Common Sense in Government.

Former Gov. Jennifer Granholm announced the program in July 2008. It offered state government funds to match private and federal funds invested in alternative energy companies, with the goal of job creation in the alternative energy industry.

“Creating jobs in the alternative energy industry in Michigan is a major component of our aggressive strategy to build a diverse and global 21st century economy,” the former governor said.

COEE grantees were supposed to gradually receive funding over time after accomplishing milestones that are decided upon as part of the grant agreements. This apparently did not happen.

According to the Auditor General, the Michigan Strategic Fund (MSF) does a poor job of ensuring milestones are met before paying grant recipients. In an audit of all 21^st Century Jobs Fund programs, which included the COEE program as well as four others, nine of 28 randomly selected recipients of MSF funds could not provide sufficient documentation to the Auditor General to support 20 of 245 reported milestone achievements. 

Additionally, the Auditor General found that the MSF “did not sufficiently document its review of eligibility requirements for the Centers of Energy Excellence (COEE) Program … we sampled eight of 27 proposals and noted that MSF did not document its review of eligibility requirements in any of the eight proposals reviewed.”

Martin Dober, Vice President of Entrepreneurship and Innovation for the Michigan Economic Development Corp., told Michigan Capitol Confidential that recipients of COEE funds were required to go through an application process. Dober said that a checklist documenting the application process was to be implemented following the Auditor General's findings, but the program has since been discontinued. The state previously committed $7.6 million, which still will be awarded.

The COEE program is administered by the Michigan Strategic Fund, which claims to hold “broad authority to promote economic development and create jobs.” Funding for the program comes from the 21^st Century Jobs Trust Fund, which funds similar programs previously reported on by Michigan Capitol Confidential.

One of the initial grants went to Mascoma Corp., which was awarded $20 million in September 2008 for a project that was to create 70 jobs.

In 2007, Gov. Granholm said, “Mascoma's decision to choose Michigan … puts Michigan on the leading edge of technology that will create good-paying jobs for Michigan citizens.”

While Mascoma has received the full $20 million, only three jobs have been created in over three years.

Similarly, A123 Systems was awarded $10 million in November 2008 for a project that was to create 750 jobs. The company, which received special attention from President Obama and was awarded a $249 million grant from the federal government, laid off over 100 workers in November while rewarding executives with excellent severance packages.

"If politicians had to invest their own money before mine or any other taxpayer, I think that would stop a lot of this corporate welfare that is bound to fail," Day said. 

Democrat State Rep. Jim Townsend said a GOP budget that does not add as much to the education budget as he would like is "atrocious."

In a June 20 letter to the editor posted on the Royal Oak Patch website, Townsend, a Royal Oak resident, said he has been subjected to misleading election year robo calls. But several of Townsend’s claims in his own letter bear a closer look.

Townsend's letter said: "As a result of last year's cuts, school districts around the state closed schools and cut an estimated 15,000 teacher and other school jobs."

The reality: Townsend is quoting from the June 2011 "We Are The People" report that said 15,000 school employees were laid off. However, that report didn't track how many of those targeted for layoff were brought back, a common practice in nearly every school district in Michigan.

An estimated 75 percent of the teachers targeted to be laid off in the summer of 2011 were recalled in the fall, according to Freedom Of Information Act responses from 550-plus districts to Michigan Capitol Confidential.

For example, the "We Are The People" website states that Brighton planned to lay off 50 teachers, which is correct. What the site didn't do is check back to find out Brighton recalled 35 of those teachers. Some districts laid off nearly every teacher, only to recall almost all of them. Townsend's numbers would conclude that nearly every teacher in certain districts to be gone, which was not the case.

Townsend's letter also said: "What's worse, the Republican school budget also pits school against school, making them compete with each other for incentive-based funding increases. This is unfair to our kids and wrong for our state. Funding should go where it's needed most, not to school districts that already have the financial wherewithal to meet our governor's arbitrarily picked and untested list of 'best practices.' "

The reality: Gov. Rick Snyder's best practices were designed to save districts money and required minimal out-of-pocket expense. Nine out of 10 school districts qualified for the bonus $100 per student money if they met those requirements. There are 550 traditional school districts and 250 charter schools according to date from the Michigan Department of Education. The state listed 719 traditional and charter districts that qualified for the $100 per student best practices bonus.

Michael Van Beek, education policy director at the Mackinac Center for Public Policy, said any district that met the best practices received the $100 per student incentive regardless of how other districts did.

Townsend's letter said: "This has pushed our kids into overflowing classrooms that lack basic supplies. In many instances, our children can no longer take textbooks home to study because there aren't enough of them to go around."

Townsend didn't respond to an email requesting one example of a district that didn't have enough money to provide basic supplies. 

"Each district receives funding to provide all students with a quality education," said Michigan Department of Education Spokeswoman Jan Ellis. "It is responsibility of each local school board and district to determine how students will be taught, what materials will are used, etc."

In 2011, public schools spent $51.4 million on textbooks, according to data from the Michigan Department of Education. That's about 0.2 percent of total expenditures ($19 billion), and about $35 per pupil.

"Since textbooks are such a small part of a district's budget, it's hard to imagine they'd be fiscally unable to provide these basic supplies," Van Beek said.

Townsend's letter said: "After cutting nearly $1 billion a year ago, Republicans this year offered to add back just $200 million. It would be as though a thief stole $100 from your wallet and then gave you back $20, expecting you to be grateful. I didn't fall for that ploy, and I trust my constituents won’t either."

The reality: This analogy assumes that schools should get the same or an increasing amount of money, regardless of what is happening to the state's economy. Any cut at any time is apparently "stolen."

"The 'thief' here also gave schools $13 billion," Van Beek said.