Democrats push ‘Michigan jobs first’ plan

Michael Gerstein
The Detroit News

Lansing — What started as a debate about whether to give the Detroit Salt Co. an edge over Canadian imports may now engulf other state contracts as lawmakers question why Michigan hasn’t been giving preference to home-based companies on public bids.

Democrats on Monday announced their intention to introduce a four-bill package to give Michigan-based businesses an economic advantage over out-of-state companies vying for generous state contracts on everything from road salt to computer upgrades and equipment.

Citing a 2013 Lansing State Journal article, Democrats claim far too much public money goes to companies based in other states to the detriment of Michigan residents.

House and Senate Democrats plan to introduce bills to give in-state companies an 8 percent edge over out-of-state businesses. It would also give Michigan companies a chance to offer a lower bid on a contract going to a company not based in-state and would require that state departments post the number of jobs created and other financial data relating to state contracts.

“We should be creating jobs right here,” said Sen. Curtis Hertel Jr., D-East Lansing, who is sponsoring legislation that’s part of the package. “It’s not legislators’ money; it’s actually the people’s money.”

But some in the business community may balk because the proposal would allow in-state companies to charge up to 8 percent more and still win the contract. That extra cost would be borne by taxpayers.

“Our membership typically isn’t fond of government interference in what’s supposed to be an open and competitive bidding process,” said Charlie Owens, Michigan state director for the National Federation of Independent Business. “That’s not an open bidding process.”

Michigan reports more than 1,000 state contracts worth more than $56 billion under a 2017 list from the Department of Technology, Management and Budget. The list includes contracts that expire in future years.

In 2016, 85 percent of state contracts went to Michigan vendors, according to the department. It is up significantly since 2013, when 66 percent of state contracts went to in-state bidders.

Hertel said lawmakers got the idea to fight back against encroaching out-of-state companies from the debate over whether the Detroit Salt Co. should have a similar edge over Canadian salt imports for highway salt. But Detroit Salt is also owned by an Ontario-based company.

The Senate approved an 8 percent advantage for Detroit Salt in May, but the House has not taken action.

Hertel said it didn’t make sense to help just one company and wanted to broaden the scope to include all state contracts. Democrats are calling it their “Michigan jobs first” plan.

House Minority Leader Sam Singh, D-East Lansing, said during a Monday news conference that home-based companies “contribute significantly more to the local economy than out-of-state companies” and bemoaned the amount of taxpayer money going to businesses in other states.

Singh said the idea is to get a better “return on investment.”

The state’s main criteria for awarding contracts is finding the cheapest one, said Department of Technology, Management and Budget spokeswoman Christyn Herman.

High-profile examples that have drawn the ire of some Democrats include a $25.2 million contract for McCann Erickson, a New York-based advertising agency with offices in more than 120 countries involved in the marketing and advertising campaign for “Pure Michigan” — an expensive state advertising campaign that croons about Michigan’s unique natural landscape.

In 2012, the Strategic Fund board approved a three-year contract to Des Moines-based Meredith Corp. to produce the glossy “Pure Michigan” travel guide magazine three times each year. It approved another three-year contract worth $1.55 million annually in 2015.

Rep. Darrin Camilleri, D-Brownstown Township, and Rep. Pam Faris, D-Clio, also sponsor bills in the package, which will be unveiled in the coming days.