Gov. Whitmer signs $1B spending bill focused on economic development

Lansing — Michigan Gov. Gretchen Whitmer signed a $1 billion spending plan into law Tuesday with the majority of the money going to an economic development fund that lawmakers hope will bring new jobs to the state.

After negotiations with Whitmer, a Democrat, the Republican-controlled House and Senate approved the proposal last Wednesday during a marathon day-long session. The bill deposits $846 million into the state's Strategic Outreach and Attraction Reserve (SOAR) Fund, including reauthorizing for the next fiscal year $206 million previously put into the account. The fund has previously been used to dole out cash grants to companies looking to expand or locate in Michigan.

In a statement Tuesday, Whitmer said the money will help "grow, attract and retain businesses bringing billions in investment and creating thousands of jobs to Michigan."

"Our work on economic development is a testament to what we are capable of when we work together," Whitmer said. "Let’s keep putting Michiganders first and moving our state forward.”  

Opponents of the bill, including Republican gubernatorial candidate Tudor Dixon, state Rep. Steve Johnson, R-Wayland and former House Appropriations Chairman Thomas Albert, R-Lowell, have criticized the legislation's spending. Albert, who resigned from his chairman position the day the bill passed the House, said his opposition stemmed from a belief that Michigan is on the verge of an economic recession.

"What we're doing today is immoral," said Rep. Steve Johnson, R-Wayland, said last week. "We are stealing money from the people of Michigan to give to a well-connected few."

Of the $846 million going to SOAR, $100 million will go to grants for improvements to "strategic sites," $75 million will go for the assessment and development of "mega-strategic sites" and $100 million will be dedicated to grants to "remediate or redevelop" landfill facilities, according to an analysis by the non-partisan House Fiscal Agency.

The Detroit News reported Saturday that the $100 million landfill cleanup money would likely benefit a property being developed by the family-owned real estate company of Bobby Schostak, the former chairman of the Michigan Republican Party.

But for the wide majority of the money being moved to the SOAR account, it's currently unclear which companies will ultimately benefit from the taxpayer funds.

Lawmakers established the SOAR Fund in December 2021 to chase large economic development deals. Before money can move out of SOAR to specific projects, the House and Senate generally must authorize the transfer.

The House and Senate initially put $1 billion in the fund. But after allocations for General Motors Co.'s electric vehicle investments and upgrades to Ford Motor Co. plants, there was about $200 million remaining in the program last week with more job-creation projects on the horizon.

It's possible some of the money in the SOAR fund could go to a Big Rapids area project by Gotion Inc., which plans to invest about $2.4 billion in private money to construct a manufacturing facility that sprawls across two townships and 19 parcels of land.

The Chinese battery parts company has said it intends to create 2,350 jobs by 2031.

Three Republican lawmakers were quoted in the statement from Whitmer's office about the bill signing. Senate Appropriations Chairman Jim Stamas, R-Midland, said the legislation invested some of the state's $7 billion surplus to support economic growth and create good jobs.

“Economic development is critical to our future," Stamas said. "As our economy faces the challenges of high inflation, labor shortages and supply-chain issues, we must help our state remain competitive for long-term, high-wage jobs."

cmauger@detroitnews.com

Staff Writer Beth LeBlanc contributed.