The Michigan House is fast-tracking a package of economic development bills that one lawmaker described as an interstate “arms race” response to the fallout from Ford Motor Co. making multi-billion-dollar EV investments in Kentucky and Tennessee.
The House Government Operations Committee on Wednesday sent a package of bills to the House floor for a likely vote later in the day that create a new set of funds for the Michigan Economic Development Corp. to use to recruit and retain businesses.
The panel also approved a five-year extension of the tax-capturing incentives for transformational brownfield redevelopment projects that billionaire Detroit businessman Dan Gilbert lobbied for in 2017.
Four House bills would create and set rules for the MEDC to establish the Strategic Outreach and Attraction Reserve (SOAR) fund and two funds that would funnel down from it: a fund for making development sites shovel-ready and a fund specifically targeted toward critical industries.
The bills do not contain appropriations, though lawmakers are expected to dip into $8 billion in unspent federal stimulus funds or the state’s $2.4 billion tax surplus to fill the funds with cash for potential job-creation deals.
But John Walsh, CEO of the Michigan Manufacturers Association, told the committee on Wednesday that the bills “provide dramatic incentives” and “puts us on the map for the first time in probably 20 years” for new large-scale industrial investment.
“What I’m telling you is we are getting our lunch taken away from other states that are more equipped to provide a variety of investments — training, business investments, land assembly,” said Walsh, a former Republican lawmaker.
The five-bill package is being rushed to a House vote later Wednesday as economic development leaders say that Michigan is the running for multiple large-scale business investment decisions totaling several billions of dollars in new investment. Lawmakers also have just five session days remaining before they break for the holidays.
MEDC officials have been publicly courting General Motors to build an EV battery plant after Ford decided to build four new plants across two mega sites in Tennessee and Kentucky.
A GM spokesman told The Detroit News on Tuesday that the automaker is “in the initial stages of considering the business case for a potential future investment at several locations, including the Orion Township area.”
Wendy Block, a lobbyist for the Michigan Chamber of Commerce, told lawmakers there are “three big projects that are out there on the table” that the bills could be used to help seal the deal with those unnamed companies. She said the potential economic development projects center around EVs and next-generation automotive jobs.
“We think this focus on site development is key,” said Block, vice president of business advocacy and member engagement for the Michigan Chamber.
Senate Bill 671, the transformational brownfield legislation, would extend the life of the incentives law to 2027. It is set to expire at the end of 2022.
Rep. Yousef Rabhi, D-Ann Arbor, questioned the need for additional tax incentives for automakers, noting the state already shells out more than $500 million annually in Michigan Economic Growth Authority (MEGA) tax incentives to GM, Ford, and Stellantis NV (the automaker formerly known as Fiat Chrysler Automobiles).
“Where does it end?” Rabhi asked. “It seems like an arms race with each state offering more and more (incentives).”