“Trust but verify” was President Ronald Reagan’s phrase he often used when he was negotiating a reduction in nuclear arms with the Soviet Union.
Various complaints that the new job creation claims had been improperly inflated by different states’ E.D. organizations have been made in the past few years. With many states are spending hundreds of millions of dollars to improve their economies it makes sense to have results that can be proven.
The most recent illustration of this problem is the January 23rd report from Michigan’s Auditor, who claimed that the 12,000 new jobs claimed by the MEDC as a result of its Renaissance Zones cannot be confirmed. The auditor finds this troubling, given that the MEDC has abated approximately $820 million in state and local taxes on this program over a 13-year period for businesses in the RZ program.
Michigan’s situation is not an isolated case. This is likely to become a trend that will impact all E.D. programs.
Every E.D. organization – at the local, regional, and state level – needs to be out in front on this issue. Whether you are an E.D. professional or a volunteer board member of an E.D. group, you should be able to verify the results your organization is claiming.
E.D. is critical to every state and every community. Today, however, all economic development organizations need to take Reagan’s approach to arms treaties.
When we use public funds for this important activity, we must be prepared to maintain the public’s trust by verifying our results.