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Michigan Committee Approves $4.5B for Transit and Development

A state House committee voted 8-3 to pass a cluster of bills that would devote billions over 10 years to Michigan’s economic development and transit. But Democrats will need at least one Republican to vote to pass the package.

Michigan State Rep. Jason Hoskins
Michigan State Rep. Jason Hoskins, D-Southfield, said the proposed overhaul of how the state invests in economic development is "a great policy" change.
Robin Buckson, The Detroit News/TNS
Bills that would devote $4.5 billion over 10 years to economic development and transit gained the approval of a Michigan House committee Tuesday, June 11, as Democratic leaders attempt to cobble together enough votes to pass the measures.

The proposals would earmark $250 million in corporate income tax revenue annually, over the next decade, to a fund focused on attracting businesses and $200 million annually to a separate fund to support "transformational mobility projects," according to the text of the legislation. In addition, $100 million each year would go to housing programs, and $50 million would be set aside for revitalization efforts.

The Michigan House Economic Development and Small Business Committee, chaired by Rep. Jason Hoskins, D- Southfield, voted 8-3 in favor of sending the bills to the full Michigan House Tuesday morning. All eight Democrats on the panel supported the measures. Three Republicans voted in opposition. Two other Republicans, Reps. John Roth of Interlochen, and David Martin of Davison, passed on voting.

"I think this is a great policy, so I hope we can get it to the floor as soon as possible," Hoskins told reporters.

The bills would represent a significant and long-term investment in transit and development by Michigan's leaders. Democratic Gov. Gretchen Whitmer has urged the Democrat-controlled Legislature to authorize incentive programs to help her administration attract businesses as population growth in the state has stalled.

However, some lawmakers are concerned the proposed allocations go too far, could tie their hands in the future and would spend too heavily on incentives benefiting large corporations.

Democrats hold a narrow 56-54 majority in the state House. Rep. Dylan Wegela, D- Garden City, testified in opposition to the bills in committee Tuesday, meaning Democratic leadership will need to somehow change his mind or find at least one Republican vote to pass the proposals.

The new economic development fund would be called the Make It In Michigan program, replacing the current Strategic Outreach and Attraction Reserve Fund, also known as SOAR. It would operate "as a corporate handout fund giving large payments to corporations," Wegela contended.

"This session alone, our body has already approved over $4 billion in corporate and business subsidies. This would bring the total to over $6 billion," Wegela testified Tuesday. "The problem is this type of economic development hasn't historically worked."

Whitmer's administration has used SOAR incentives to land projects from General Motors and Ford Motor Co.

In a statement, Whitmer said Tuesday's committee votes deliver "on our comprehensive vision to invest in people, uplift places and win projects."

"Together, we will secure the future of electric cars, semiconductor chips, technology and clean energy here in Michigan, while delivering historic and long-overdue investments in housing and transit to make our communities better places to live, work, and invest," the governor added.

Supporters of the new package are hoping that a coalition of Democrats — some of whom favor the incentives and some of whom prefer the transit money — along with Republicans can get the bills through the House.

Roth, a Republican from the Traverse City area, didn't rule out voting in support on the House floor.

Roth said he likely wouldn't cast the deciding vote for the bills, meaning he wouldn't be the 56th vote. But he would be open to backing the bills if five to 10 GOP lawmakers joined him. Roth said he's worried about the length of the investments, 10 years, and he wants to see more guarantees that money would go to northern Michigan.

He's also concerned about the possibility that some government agency could issue bonds against the new revenue stream for a large infusion of money upfront for a massive project but that would need to be paid back over the 10-year period, Roth said.

"I like the overall outline," Roth said.

Hoskins said he hadn't heard of the idea that the new allocations could allow for bonding.

Likewise, Hoskins said he's only heard "rumors" that the new money available for projects, under the bills, would be used to redevelop the Renaissance Center in Detroit. GM announced in April it intends to move its headquarters out of the 47-year-old, seven-tower center and into the new Hudson's Detroit building on Woodward Avenue.

"There are a number of projects that are interested in coming to the state and looking for some sort of incentives," Hoskins said.

In addition to Republicans, supporters of the bills might also have to convince moderate Democrats to get on board.

Rep. Tulio Liberati, D- Allen Park, voted in support during Tuesday's committee but said, afterward, that there's "more work to do."

Like Roth, Liberati said he was also concerned about the 10-year timeframe.

Rep. Will Snyder, D- Muskegon, declined to comment on the bills on Tuesday morning.

Asked if he was definitely supportive of them, Snyder replied, "We'll have to see what came out of committee this morning."



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