Pushback over $1B in new spending
LANSING (AP) — The Michigan Legislature this week added $1 billion in new spending to an already record-breaking $76 billion budget, a boost intended to attract large economic projects and meeting immediate pushback from several key Republicans.
A majority of the $1 billion package is bound for an economic development fund that has previously been used to send hundreds of millions of dollars in incentives to Ford Motor Co. and General Motors. Funding for the supplemental budget approved Wednesday would come from the state’s $7 billion surplus. The measure now goes to Democratic Gov. Gretchen Whitmer for consideration.
The Strategic Outreach and Attraction Reserve fund, commonly referred to as SOAR, has been heralded as a way to attract businesses to the state and the approved $846 million will help replenish the fund. Lawmakers used the SOAR fund in March to allocate $666 million for General Motors projects that are expected to create between 3,200 and 4,000 jobs.
Controversy has also surrounded the fund. Just months after Ford received $101 million in tax incentives for projects in the state, the company announced it was laying off 3,000 white-collar workers – mostly in Michigan.
Curtis Hertel, the top Democrat on the Senate Appropriations Committee, said the $101 million agreement between Ford and the state will still create 3,200 new hourly jobs and is separate from the layoffs.
“Do I wish that Ford kept those other jobs? Absolutely,” said Hertel. “But the reality is that if we hadn’t made the SOAR investment, we would have lost both those jobs.”
The supplemental package was the result of negotiations between the Republican-majority Legislature and Whitmer. But multiple key Republicans lawmakers spoke out against it.
Republican state Rep. Thomas Albert, the chair of the House Appropriations Committee who is running for a state Senate seat, resigned from his position early in the day in protest.
“The measure the Legislature is considering today is reckless and irresponsible to taxpayers, and I will be voting against it,” Albert said in a statement released following his resignation.
GOP gubernatorial candidate Tudor Dixon thanked Albert on social media for “standing up for Michigan taxpayers” and also questioned whether any of the SOAR fund will go to a plant in western Michigan planned by an Chinese electric vehicle battery manufacturer in a video statement released on social media.
The legislation passed did not mention specific economic development projects.
Earlier this week, local officials in western Michigan approved tax breaks for a $2.4 billion electronic battery plant proposed by the company Gotion in Big Rapids.
Otie McKinley, a spokesman for the Michigan Economic Development Corporation, the group that handles SOAR fund, said in a statement Thursday that the group is “working with our partners to attract a transformational investment at the site in Big Rapids.”