One of Michigan’s major economic incentives programs could be in for a new name and a new funding formula. That’s under bills that made it out of the state House Economic Development and Small Business Committee Tuesday.
The package would allocate up to $250 million in state corporate income tax revenue each fiscal year for the Strategic Outreach and Attraction Reserve, better known as the SOAR Fund. The fund itself would be renamed the “Make it in Michigan Fund.”
The legislation would send up to $100 million toward the state’s Housing and Community Development Fund, $50 million toward a revitalization and placemaking fund, and $200 million toward a new Michigan mobility trust fund.
Committee Chair Jason Hoskins (D-Southfield) said that transportation investment is critical.
“We need to lay the foundation for it right now and we are so behind so many other places in the country that we need to do something. So, I’m hoping that this is just the foundation for more transit here in the state,” Hoskins said.
When the SOAR Fund first came into being, it depended entirely on lawmakers appropriating money for it every time it started to run low.
That changed with the passage of sweeping legislation last year that created an automatic funding mechanism in place through the end of Fiscal Year 2025.
The new funding mechanism would run for ten years.
Supporters of the legislation say changes in Tuesday’s package would allow for oversight, like claw-backs of money if not everyone holds up their end of the bargain.
But Republicans still say there’s not enough legislative oversight of the program.
Representative Mark Tisdel (R-Rochester Hills) is the minority vice chair of the economic development committee. He said lawmakers should get a chance to vote on whether to put money into the program as an oversight measure.
“There are a lot of moving parts to these things. And when you put something like that on autopilot and you start to maybe even just limit what the House and the Senate have a chance to vote on, that’s a problem,” Tisdel said.
It’s unclear if the bills have enough support to make it out of the chamber should they see a floor vote.
Democrats have seen at least one member of their own caucus oppose any legislation that would pay businesses to expand their imprint in Michigan. Meanwhile, Republicans have been reluctant to help Democrats with bills relating to the program, arguing it has gotten out of control since Republican lawmakers helped get it started in 2021.
Governor Gretchen Whitmer, who seemed hesitant about some of the Senate proposals to divert half of the SOAR Fund’s money toward community-based projects when asked her thoughts earlier this year, appears to have come around with the House proposal adopted today.
