News Story

Top DIA Officials Receive Huge Raises While Running Deficit, Raking in Taxpayer Money

Detroit Institute of Arts director sees compensation increase from $455K to $514K

Soon after voters approved a three-county $230 million millage for the Detroit Institute of Arts, its top two officers received increases of $58,415 and $98,564 in compensation.

Graham Beal, director of the DIA, saw his total compensation increase from $455,453 in 2012 to $513,868 in 2013, a 12.8 percent increase. In two years, Beal’s total compensation has increased 20 percent from $426,699 in 2011 to the $513,868.

Annmarie Erickson, executive vice president of the DIA, saw her total compensation jump 36.3 percent as it increased from $270,802 in 2012 to $369,366 in 2013. Erickson was recently given an additional title of Chief Operating Officer, according to the DIA website.

The salaries are reported on the DIA’s 990 Form. The most recent 2013 990 Form from the DIA was recently released by Guidestar.

The increases came despite what is described on the DIA website as a "structural operating deficit."

In 2012, voters in Macomb, Wayne and Oakland counties approved a 10-year, $230 million millage for the DIA.

“They’ve managed to put the interests of the art patron above the interests of everybody else in the state of Michigan and enrich themselves while doing it,” said Leon Drolet, chairman of the Michigan Taxpayers Alliance, who opposed the DIA millage. “That’s quite a feat. … They were able to put a very narrow interest ahead of the public interest so effectively, they should be in Congress.”

When the city of Detroit went through bankruptcy, there was some discussion about what could happen to the DIA’s art collection. The museum ended up being helped by state taxpayers and local foundations. Throughout the process, the DIA was clear none of its art should be sold.

“The sale or encumbrance of even one piece of art to pay Detroit’s debts would have a catastrophic effect on the museum, the city and region,” the DIA website stated.

DIA spokeswoman Pamela Marcil said Beal's compensation is determined by a compensation committee of the DIA board of directors and that Erickson's compensation is recommended by Beal but also approved by the committee. Marcil also said Erickson's increase was due to her being promoted to chief operating officer.

(Editor's note: This story was updated with the DIA's response after it was originally published.)

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

Environmental Group Praises Michigan For Press Releases About 'Green Jobs'

Past job claims rarely came to fruition

While job creation can be a badge of honor for many politicians, a report praising Michigan for adding "green jobs" is a bit premature.

Environmental Entrepreneurs, which describes itself as "a national community of business leaders who promote sound environmental policy that builds economic prosperity," released a recent report that stated, “Michigan ranks third in clean energy and clean transportation jobs announced in second quarter.”

The news made the rounds on social media and the announcement was re-Tweeted by former Michigan Gov. Jennifer Granholm.

The report, however, is not based on actual jobs created. It’s based on jobs “announced” by companies in press releases.

Environmental Entrepreneurs claims Michigan created "1,450 clean energy and clean transportation jobs" that were announced between April and June, of 2014, placing the state behind first-place Arizona and second-place California.

Jeff Benzak, spokesman for Environmental Entrepreneurs, said the company does not follow up with every company directly to confirm that announced jobs eventually match job creation.

“However, should news reports, press releases, etc., down the line report on the total number of hires, we do update our database accordingly,” Benzak said. “On some occasions, not all of the jobs we track come to fruition, and we make that change. On other occasions, the project is expanded and more jobs are added, and we make that change as well.”

Michigan has a well-documented history of problems with press release economics, especially in the field of alternative energy.

Four of the country’s biggest green energy companies that filed for bankruptcy had operations in Michigan.

The most spectacular failure in Michigan was A123 Systems, which Sen. Carl Levin and U.S. Secretary of Energy Steven Chu had predicted would create thousands of jobs in 2010. Instead, the company filed for bankruptcy in 2012. The Michigan Economic Development Corp. stated the company had 844 full-time employees at its Livonia battery plant weeks before A123 Systems filed for bankruptcy.

In 2010, MIRS News broke down the MEDC's job claims in press releases under Gov. Granholm's tenure.

The MEDC claimed credit for 1.4 million direct, retained and indirect jobs that would have accounted for 29 percent of the state’s labor force at that time. MIRS found that the MEDC had claimed credit for creating 204,818 jobs since 2003. But a report from Michigan's Auditor General found that just 28 percent of the new jobs the MEDC projected actually materialized.

“People should take these rankings with a grain of salt,” said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. “As we have seen in Michigan’s programs, press releases rarely translate into actual jobs.”

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.