Michigan lawmakers approved a $1 billion investment in new government-backed incentives Tuesday evening, finalizing an effort to entice large businesses to invest in the state.
Senate Bill 85 deposits $1 billion in state general fund dollars into the newly-created Strategic Outreach and Attraction Reserve Fund, the funding mechanism for an initiative to offer incentives for businesses interested in building new manufacturing or commercial sites and creating jobs.
Another $75 million in state dollars included in the plan would offset costs of industrial and commercial personal property tax exemptions, and $409 million in federal COVID-19 aid would fund a grant program for businesses that took a financial hit during the pandemic.
That legislation was part of a package that taken together would create pots of money to direct state taxpayer dollars towards attracting large business projects, including a possible GM plant for electric vehicle batteries.
The bills passed late Tuesday night after a lengthy session as lawmakers and the administration worked to shepherd the package through before the Legislature breaks for the year. The legislation heads next to Gov. Gretchen Whitmer’s desk.
Whitmer praised the package in a statement after the vote, calling the economic development fund critical to creating tens of thousands of new jobs.
“Thanks to the effective collaboration of legislative leadership in both parties, our state will be competitive for every dollar and every job for years to come,” Whitmer said.
Legislature-approved funding for economic incentives would be transferred into one of two programs under the package: a fund to invest in businesses deemed critical industries, such as manufacturing, and another for developing possible sites for business investment.
Supporters of the legislation have stressed the urgency of taking action this month due to pending projects, although critics have argued the plan would divert taxpayer dollars towards corporations instead of helping citizens.
Sen. Ken Horn, R-Frankenmuth, said the legislation was a means to “secure Michigan’s future,” noting that in addition to keeping auto industry jobs in-state, the incentive program could appeal to other industries like aerospace, pharmaceuticals, defense and chemical.
“Michigan is on the precipice of a huge industrial evolution...the actions we take today will set the stage for our grandchildren’s future,” he said. “This is the day the eyes of the world turn our way, and we’ll be ready.”
Senate Appropriations Chair Jim Stamas, R-Midland, said during a conference committee on the spending bill Tuesday night that lawmakers need to work for every job available, adding, “Our families expect and deserve us to do nothing less than fight for them.”
Opposition to the plan came from a handful of Republicans and Democrats. The Senate passed the funding piece of the legislation in a 25-11 vote, with the House following in a 78-25 vote.
Rep. Cynthia Johnson, D-Detroit, categorized the proposal as “corporate welfare” with no guarantee of long-term, high-paying jobs.
And Sen. Jeff Irwin, D-Ann Arbor, said lawmakers should focus on other, more important metrics of economic development, such as education and affordable housing.
He questioned why the Legislature was “stuffing the stockings of corporate America full of cash” while leaving behind vulnerable residents.
The package was spurred by Ford’s recent $11.4 billion investment at new plants in Tennessee and Kentucky, which will build F-Series pickups and electric vehicle batteries.
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