Ford battery plant site prep main recipient of funds in $1.3 billion spending bill sent to governor
Michigan lawmakers sent a bill to spend $1.3 billion on economic development and other projects to the governor’s desk Wednesday evening.
The largest portion of money would go toward preparing a site in Calhoun County for a Ford Motor Company battery plant — though lawmakers stressed Ford will not directly receive cash from the site preparation funding.
Slightly less than $300 million would be used for Michigan Strategic Fund grants to help with land acquisition and predevelopment work. Another $330 million would go toward related infrastructure projects like water system, road, and railway improvements.
House Speaker Joe Tate (D-Detroit) said the spending is necessary to promote Michigan’s economic future.
“We are at an inflection point. I think not only in our country, in our globe, when we’re looking at creating the jobs of the future. And I think we have to be competitive there at the end of the day,” Tate told reporters after Wednesday’s vote.
Site readiness spending had previously been outlined in a $750 million ask the Michigan Economic Development Corporation made of lawmakers last week.
That’s on top of $210 million in separate incentives the strategic fund already approved for Ford directly through its Strategic Outreach and Attraction Reserve (SOAR) Fund. It also OK’d a Renaissance Zone designation set to provide about $772 million in tax breaks over the course of 15 years.
Wednesday’s bill would put another $170.3 million into the SOAR Fund often used to attract megaprojects like the battery plant.
Many Republican lawmakers and at least one Democratic lawmaker have expressed skepticism at providing large corporations with large incentives.
Representative Bill G. Schuette (R-Midland) said the legislation wasn’t transparent enough.
“The people of the State of Michigan deserve to know that their dollars are being spent, how their dollars are being spent, and that the return on the investment of their taxpayer resources is sound,” Schuette said.
The bill ultimately passed the House 59-49, with one Democrat voting no and four Republicans voting yes.
A spokesperson for Republican minority leadership said they had negotiated a deal granting them some concessions in exchange for a few of their own members helping get the legislation across the finish line.
Those included an agreement to provide both the House and Senate minority leaders an appointee to the Michigan Strategic Fund Board, end sales and use tax collection on delivery and installation fees, and provide tax cuts for small businesses.
When asked to confirm whether those items were part of any deal to get Republican votes, Tate did not answer directly, instead redirecting attention back to HB 4016’s passage Wednesday night.
“We’re going to be taking up other bills as we go along but really the bill speaks for itself in terms of the contents that we have and that it was done in a bipartisan fashion,” Tate said.
The bill previously passed the state Senate Tuesday after hours of negotiations in that chamber.
Among the results of those talks, Democrats sent their premier tax cut plan to the governor’s desk without immediate effect. That means $180 tax rebate checks outlined in the bill will not go out, and a projected income tax cut stemming from high state revenue may go into place unimpeded.
Republicans in both chambers of the Legislature had worried money used for the checks would lower state revenue below the threshold needed to trigger that tax cut.
Aside from the Ford project, the legislation passed Wednesday night also spends around $500 million in federal money on projects like energy efficiency home updates and health care worker recruitment and retention.