Whitmer Signs $1.5B Biz Incentive Bills, $841M Plan For COVID Testing, Rental AidDecember 22, 2021
Dec. 20, 2021
Beth LeBlanc and Craig Mauger
Gov. Gretchen Whitmer signed several bills Monday that state leaders say will finance millions of dollars in incentives that will attract businesses, create job and make Michigan more competitive.
The $1.48 billion spending plan signed by Whitmer with GOP legislative leaders and economic development officials in tow in Detroit will use tax dollars to lure economic development to Michigan, including a new General Motors Co. battery plant and three other “serious projects.”
Another $841 million supplemental spending plan targets federal relief funds toward emergency rental assistance, COVID-19 testing in K-12 schools, teacher recruitment and environmental threats in Benton Harbor.
The business incentives program was prompted by Ford Motor Co.’s September announcement of an $11 billion investment, along with 11,000 jobs, in Kentucky and Tennessee, Whitmer said Monday. Within the industry, there have been doubts that Michigan could move fast enough or with the bipartisan support necessary to deliver for business, the Democratic governor said.
The incentive package puts those concerns to rest, she said.
“Yes, we can move fast,” Whitmer said. “Yes, we can make Lansing work incredibly well together. And now we have tools. So we have put that narrative behind us.”
House Speaker Jason Wentworth, R-Farwell, said the package reflects the competitive spirit in Michigan that revved up in the wake of Ford’s announcement.
“This is just a building block of what’s to come for Michigan,” Wentworth said. “…This issue right here cannot go into the background. We have to keep this in the forefront.”
The package, Senate Majority Leader Mike Shirkey said, reflects a combination of preparation, anticipation, competition and long-term planning. But he said the incentives are only part of the answer. Business-friendly regulations, taxation and supplies of energy also are needed.
“We are not just demonstrating Michigan is in the game, but we are affirming we are at the table,” said Shirkey, R-Clarklake.
The proposal, which the House and Senate approved last week on their last session day of 2021, featured $1 billion for economic development incentives and $409 million in assistance for businesses affected by the COVID-19 pandemic.
Along with the $1 billion outlay, Whitmer signed into law a package of bills to create the Strategic Outreach and Attraction Reserve Fund in the Michigan Department of Labor and Economic Opportunity. The $1 billion would eventually go into the SOAR Fund and could only move to two other new funds — the Michigan Strategic Site Readiness Fund and the Critical Industry Fund — with the approval of lawmakers, giving them influence over the decisions.
The site readiness fund would be charged with spending money on activities related to “strategic sites” and “mega-strategic sites.” The other fund, the Critical Industry Fund, would be focused on providing investments to “qualified businesses for deal-closing, gap financing or other economic assistance to create new qualified jobs or make capital investments.”
The bills were introduced as General Motors Co. eyes property in Delta Township near Lansing to build its third multibillion-dollar battery cell manufacturing plant in the United States. The proposed investment is pegged at $2.5 billion, according to GM’s tax exemption requests to the city of Lansing, and the plant would create an estimated 1,700 jobs in the region when it is fully operational.
Lansing City Council is set to meet Monday night to consider a tax exemption for the battery cell manufacturing plant.
The $841 million supplemental, separate from the incentive package, includes $150 million for COVID testing in K-12 schools, $140 million in federal money for emergency rental assistance, $10 million for teacher recruitment and training, and $36 million for “emerging environmental threats” in Benton Harbor and other communities.
Another $14 million in federal funds would go toward nursing home and long-term care facility strike teams to build and maintain infection control and $19 million in federal funds for mental health services.
The bill also had $22 million for one-time grants: $9 million for the North American International Auto Show, $5 million for converting a floor at the Helen DeVos Children’s Hospital into a pediatric psychiatric unit and $1 million for the St. Clair Convention Center.
Prior to the signing of the two spending bills Monday, Michigan had been sitting on about $10 billion in federal relief funds that remained unappropriated, of which legislators had discretion over about $5.7 billion.
As recently as Friday, Michigan’s Democratic congressional delegation members sent a letter to legislative leaders urging them to spend the federal relief money.
“We worked hard in Congress to bring home billions of dollars to help Michigan families, small businesses and seniors get through this pandemic,” the letter said. “That is why we were surprised to learn that the State House adjourned early — with billions still unspent and rising COVID-19 hospitalizations.”