State business recruitment agency lays off 65 workers

Gary Heinlein
The Detroit News

Lansing — Michigan’s quasi-public business recruitment agency will lay off up to 65 of its 307 employees because of a reduction in state and corporate funding.

The job cuts are tied to a 2015-2016 fiscal year spending plan the agency’s executive committee adopted Tuesday, said spokesman Michael Shore. The board approved a new budget of just under $352 million, down $130 million from its current $482 million spending plan.

MEDC’s new budget reflects a 24-percent drop in state funding approved by lawmakers seeking to redirect money toward increasing road repair funding by at least $1.2 billion a year. Gov. Rick Snyder and legislative leaders were scheduled Tuesday to discuss road funding proposals again.

Steve Arwood, the agency’s CEO, warned in August that cuts also were resulting from reduced corporate funding. It will be down 47 percent in the new fiscal year, according to Shore.

Another factor affecting funding for MEDC is a drop of at least $7 million in revenue because the Gun Lake Indian Tribe has suspended payments to the state from its tribal casino pact due to the state’s introduction of Internet lottery sales. The agency gets about $60 million a year from tribal gaming agreements.

“Our organization’s greatest asset is our talented people, so it is painful to know that some of their jobs will be impacted by this new budget,” Arwood said in a statement. “Many of them have worked tirelessly over the years to bring the organization closer to accomplishing its mission.”

MEDC Executive Committee Chairman Doug Rothwell said the new budget “puts a laser focus on supporting the MEDC’s core mission of business growth and attraction, community vitality and marketing our great state.”