Michigan transit backers race to $6B economic development plan | Bridge Michigan

3 min read

The 10-year funding plan calls for a total of: 

  • $2.5 billion for the traditional economic development incentives intended to attract employers and create jobs — half the current funding for SOAR
  • $2 billion in transformational transit and mobility projects
  • $1 billion to the Housing and Community Development Fund to build affordable housing across the state.
  • $500 million to the Revitalization and Placemaking Fund to support community projects, like increasing childcare options

The transportation component would be “the largest sustained investment in transit in Michigan’s history,” Rep. Jason Morgan, D-Ann Arbor, said of his bill. 

“This is strategically necessary to strengthen talent attraction, grow Michigan’s support for our businesses and remove barriers to economic opportunity.”

The funding will offer operating support for the state’s transit agencies, dedicated funding for what Morgan called “transformational transit projects” and flexibility for lower-population regions to invest in options that meet their needs. 

“The lack of high quality, comprehensive transit is a fundamental barrier to talent attraction, workforce development and economic mobility,” Morgan said. 

Transit supporters from local governments and the Michigan Public Transit Association agreed with Morgan, detailing what kinds of options they’d like to see, from wish-list projects to basic services in largely rural areas.

“The majority of the riders for rural transit systems are transit-dependent riders, not choice riders,” said Heidi Wenzel, president of the statewide association.

The plan to expand SOAR comes amid mounting criticism over the program, in part because of the quality and pay of the jobs promised by recipients, the vetting of companies and whether the payback was worth the cost.

A Bridge investigation published in March showed that Michigan last year pledged $335 million in economic development incentives to 83 companies that planned to create 11,408 jobs. In all, 40% of jobs created pay less than the state’s average, and nearly 90% of incentives went toward manufacturing jobs.

Unclear so far is which elements of SOAR legislators might retain, and what could change with Michigan Economic Development Corporation oversight. The transportation component, however, would be directed by a new oversight board similar to the Michigan Strategic Fund, the MEDC’s public funding arm. 

Opposition to the House bills has been limited so far, Hoskins said, with over 90 letters coming in to support the plan. 

One critic is James Hohman, fiscal analyst for the Mackinac Center for Public Policy, a free-market think tank that has long opposed corporate subsidies. He said the policies won’t deliver jobs that justify the spending.

“The bills authorize $3 billion in new business subsidies that have proven ineffective at creating jobs and are expensive to the state,” Hohman told Bridge.

Supporters on Tuesday focused less on business attraction than how the new plan could alleviate the conditions that prevent business growth. 

“What makes this particular set of bills different is the corresponding investment that goes beyond just a business attraction,” said Dan Gilmartin, CEO of the  Michigan Municipal League.

“This is a way to attract and retain jobs in Michigan and make Michigan a better place to live.“

The bills from the Democrat-led House follow similar SOAR overhaul bills introduced by Senate Democrats in late 2023 after nearly a year of discussions and committee meetings led by Sen. Mallory McMorrow, D-Royal Oak.

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