While bipartisan leaders toast $1.5B business incentives plan, critics blast it as a ‘bribe’

The last scheduled day of votes for the Michigan Legislature was a long and pricey one, with state lawmakers finalizing a slate of economic incentive bills to the tune of about $1.5 billion after more than 12 hours of session.

The chunk of funds for new taxpayer-funded subsidies comes from a pot of unused discretionary federal stimulus dollars. The GOP-led Legislature will have oversight of how the funds are spent by the quasi-governmental Michigan Economic Development Corporation (MEDC).

The bipartisan deal — which could benefit a possible General Motors battery manufacturing plant near Lansing — was touted by leaders for ensuring Michigan can be competitive with other states in attracting jobs.

“Today, legislative leadership from both parties came together to pass critical bills that will back small businesses and empower Michigan to grow and attract billions in investment and create tens of thousands of good-paying jobs,” Gov. Gretchen Whitmer said in a statement Tuesday.

“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 continued, adding that she believes the bills will create “tens of thousands of good-paying jobs” and deliver needed resources directly to small businesses.

The new fund signals that Michigan is “replanting our flag in the ground,” said state Sen. Ken Horn (R-Frankenmuth) on Tuesday. “… You’ll want to mark this date on your calendar as the day that Michigan changed its trajectory.”

Senate Bill 85 appropriates $1.5 billion in funds for the incentives legislation. It was passed by both chambers and heads to the governor.

Talks about the bill went on for hours as the conference committee stood at ease while leaders worked out final details. The appropriations bill also contains $409 million in federal aid for businesses affected by the ongoing COVID-19 pandemic, a top priority for Republicans.

Not everyone was pleased by the package, however, as state Sen. Jeff Irwin (D-Ann Arbor) railed against the incentives bills being an expensive “bribe” for companies to come to Michigan rather than spending money on fixing other problems in the state first.

“We are here reacting quickly and out of fear of loss, and we’re moving quickly to pass a billion dollars in corporate welfare,” Irwin said. “… We are failing on the most important metrics for economic development. We are failing on the most important priorities to bring prosperity to our state. And we’re rushing to give a billion dollars away in corporate profit.”

Irwin cited funding-deficient schools that need help, a “broken mental health system” and “people sleeping on our streets.” He said he was disappointed to be “voting on another package that’s motivated by fear.”

The legislation package was also met with some criticism before Tuesday’s votes, as some lawmakers who crafted the bills signed non-disclosure agreements (NDAs) from the MEDC.

Libertarian former U.S. Rep. Justin Amash called the unusual step “cronyism and corporate welfare.”

SB 769 and HB 5602 create the Strategic Outreach Attraction Reserve (SOAR) Fund, introduced by state Sen. Kim LaSata (R-Bainbridge Twp.) and state Rep. Jack O’Malley (R-Lake Ann), which aims to attract businesses to the state by helping them to create jobs and provide other financial assistance.

The fund, housed within the Department of Labor and Economic Opportunity (LEO), will also have the ability to appropriate funds to two other funds. The Senate version of the bill was passed and ordered enrolled Tuesday for presentation to the governor.

SB 770 and HB 5603 create the “Michigan Strategic Site Readiness Fund,” introduced by state Sen. Curtis VanderWall (R-Ludington) and state Rep. Julie Calley (R-Portland), will use funds from the SOAR fund to provide grants, loans, investments and other assistance to businesses to attract and retain them in the state. Those are meant to help with purchasing land for a site, site preparation, remediation or rehabilitation, infrastructure improvements and more.

The House version of the legislation was passed and now heads to the governor’s desk.

SB 771 and HB 5604 create the “Critical Industry Fund” account within the Investment Fund, introduced by state Sen. Roger Victory (R-Georgetown Twp.) and state Rep. Ben Frederick (R-Owosso), which would also receive funds from the SOAR Fund to assist businesses with certain costs.

Each Senate bill is tie-barred to HB 4082, which would limit the power of the State Administrative Board — over which Whitmer has control — to transfer funding between appropriations line items. That bill also completed final passage in the state Senate Tuesday.

Following the Michigan Legislature’s sweeping final session, the chambers are not set to resume business until they reconvene on Jan. 12. Non-voting sessions are scheduled for Wednesday and the sine die adjournment session will be held on Dec. 29.