State Dems push record transit funding tied to corporate incentives
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Rep. Dylan Wegela (D-Garden City) testifies against a package of bills that would update the state's fund to attract large businesses and deliver record public transit funding during a Michigan House Economic Development and Small Business Committee meeting June 11. Photo: Michigan House TV
Two progressive Democrats could block more than $2 billion for public transit projects, which is tied to billions for corporate incentives over 10 years in a revamp of the state's economic development program.
Why it matters: Public perception over subsidies for large corporations has shifted in the years since the state's multibillion-dollar fund to subsidize large manufacturing projects, known as SOAR, was created.
- SOAR, rebranded as Make it in Michigan, is a key piece of the governor's "comprehensive vision" to boost the state's population.
State of play: That shift is playing out in the Legislature, where Republicans say the attraction fund hasn't worked and Democrats do not have enough votes with their 56-54 majority to pass the bills to reach the governor's desk.
What's inside: A total of $6 billion in spending would come from the legislation that for the next 10 years would send $250 million annually in corporate income tax revenue to a fund used to attract large businesses like the planned EV battery plant at General Motors' Orion Assembly plant in north Oakland County.
- Another $200 million each year would go toward a separate fund for "transformational mobility projects" in the form of a new Michigan mobility trust fund.
- And $150 million annually would go toward housing programs and revitalization efforts.
What they're saying: "It's not just the businesses that we want to attract, we want to attract people too," Jason Hoskins (D-Southfield), chair of the state House's economic development committee, tells Axios.
- "This is the most money we've ever proposed into transit, so as you can imagine a lot of transit advocates are excited about this."
Catch up quick: The SOAR fund has granted nearly $2 billion to Ford Motor Co. and GM since its creation in 2021, which was viewed as a reaction by the governor and then-Republican led Legislature to Ford and partner SK Innovation investing $11.4 billion in manufacturing hubs in Tennessee and Kentucky.
- Lawmakers signaled last year they wanted to remake SOAR to improve accountability for companies getting millions in state funds.
The other side: Democrats are missing votes to pass the proposals through the House from Reps. Dylan Wegela (D-Garden City) and Emily Dievendorf (D-Lansing), who say public dollars should go to public spaces instead of corporations.
- "We have decades of evidence that this type of economic development does not work and does not return the investment that is promised," Wegela said in his testimony against the bills during the economic development committee meeting last week.
- "When you have the governor pushing this as their primary economic theory, there's a lot of pressure for [Democrats] to not stand up to that," Wegela told Axios in an interview Wednesday.
- He says he'll vote against the bills should the package come to the floor. Dievendorf could not be reached for comment.
What's next: While the House listed the package on Thursday's agenda, Hoskins said Wednesday that negotiations are continuing.
- The bills passed through the economic development committee last week, with unanimous support from Democrats and no support from Republicans, three of whom voted against the bills.
- "My hope is it dies," Wegela says.