(Source: MIRS.news, Published 03/01/2023) The $1.338 billion supplemental bill highlighted by nearly $800 million to prepare 1,800 acres near Marshall for a Ford battery plant, among likely other things, passed the House Wednesday, 59-49, after a full day of closed-door negotiations.
Four Republicans crossed over to vote with nearly the entire Democratic caucus as Gov. Gretchen Whitmer scored another key legislative economic development victory in the race to lock down manufacturing sites for the presumed emerging electric vehicle market.
The mid-year supplemental spending bill, HB 4016, passed the Senate on Tuesday and will now go to the Governor for her signature.
“The reality is that this resets the job market,” said Rep. Phil Green (R-Millington), one of the Republican yes votes. “It gives us a foundation in manufacturing again. I love having a hometown company bring back its manufacturing jobs from China back to Michigan. What a win.”
But Green held a minority viewpoint in his caucus.
While Republicans voted for economic development money through the Strategic Outreach and Attraction Reserve Fund (SOAR) before, much of the caucus was a hard no on this. This included Rep. Sarah Lightner (R-Springport), who represents Marshall in the state House. In short, she didn't feel like it was a good deal.
Unlike other SOAR projects, the return on investment on the Ford plant wasn't great. The average salary for the projected 2,500 new jobs wasn't great – as low as $20 an hour, but a high of $50 an hour. Also, the $630 million for the site development work seemed to spring out of nowhere. It's not mentioned in the Michigan Economic Development Corporation's Feb. 13 memo on the project.
It's also questionable whether the community wants to turn this huge swatch of farmland, forest and homesteads along the Kalamazoo River and Michigan Avenue into a huge manufacturing center.
"This is a ridiculous amount of money for the state to spend on a project that only nets a few thousand jobs," said Rep. Andrew Fink (R-Osseo). "And this minimal payoff will be the result of an embarrassingly opaque process in which the Governor tried to steal the people's tax cut, hide the true price tag and exaggerate the benefits."
House Speaker Joe Tate (D-Detroit) did not specifically speak to Wednesday's negotiations, but said that the decision to put the bill forward came from conversations about the importance of what they’re bringing to the table with the supplemental, and the bipartisan votes speak for themselves.
When asked if there is an end in sight on corporate incentive packages, Tate said it’s important to remain competitive.
“At the end of the day, we have to be able to ensure that we are competing, not only in the United States but around the globe,” he said.
Despite a lack of successful Republican amendments, four Republican members voted in favor of the bill. Reps. Phil Green (R-Millington), Mike Mueller (R-Linden), Kathy Schmaltz (R-Jackson) and Curtis VanderWall (R-Ludington) all voted in favor, while Rep. Dylan Wegela (D-Garden City) was the only anti-SOAR vote for Democrats. Reps. Joseph A. Aragona (R-Clinton Township) and William Bruck (R-Erie) didn't vote.
House Republican spokesperson Jeremiah Ward said Republicans got on board after a spoken agreement for future legislation that would include tax cuts for small businesses, exemptions to sales and use tax for delivery and installations and industrial processing for aggregate sales.
The agreement also includes a statutory change to the Michigan Strategic Fund Board, which would allow the minority leader from each chamber to get one appointee, according to Ward.
Several Republican Reps., including Timothy Beson (R-Bay City) and Bill G. Schuette (R-Midland), expressed frustration about the speed the bill was brought forward and lack of transparency with the process.
The bill, which originally passed out of the House as a shell, came back to the chamber on Wednesday with roughly $800 million to prepare land near Marshall for a new ford electric vehicle battery plant after it passed out of the Senate on Tuesday.
The bill was approved by the Senate, 22-16, and given immediate effect, at the cost of losing immediate effect on Gov. Gretchen Whitmer’s tax plan: HB 4001.
HB 4016 now includes $330 million on transportation for the Ford project, $300 million to prepare the land for development and $170 million for the Strategic Outreach and Attraction Reserve (SOAR) Fund.
In addition to SOAR funding, the bill details the $150 million affordable housing program that is designed to lower costs for lower-income potential homeowners, along with several chunks of federal funding to advance energy efficient upgrades for homeowners and landlords, hospital hiring and training, staffing at long-term care nursing facilities, facility improvements for school centers and senior homes, phosphorus and nitrogen reductions in Lake Erie and Saginaw Bay and suicide prevention.
The bill was taken up by the House at around 8:30 p.m. after nearly eight hours of negotiations, and a brief recess to allow the 3 p.m. House Judiciary Committee to meet.
Nine Republican members brought forward amendments, some having to do with the Ford project investment and some unrelated to the project. All were shot down.
Rep. Tom Kuhn (R-Troy) wanted to cut the state's funding and require Ford, or whoever the end user was, to make the pad-ready site improvements.
Rep. Sarah Lightner (R-Springport) wanted the jobs created by the Ford project to pay a minimum of 135% over the median wage for the prosperity region, while Rep. Ann Bollin (R-Brighton) proposed that the return on taxpayer investments be at least five to one.
Rep. Donni Steele (R-Lake Orion)’s amendment required end users to bid out work on a competitive basis, while Rep. Jaime Greene (R-Richmond)’s prohibited any end user of funding from having a partnership or contractual arrangement with China, after several Republican members expressed concern about the possibility of Chinese Communist Party involvement with Contemporary Amperex Technology Co. Ltd. (CATL), a planned technical service partner.
Rep. Andrew Fink (R-Osseo)’s amendment would prohibit any end user from having a partnership with an entity that uses child labor, while Rep. Bill G. Schuette (R-Midland)’s amendment combined several of the above, requiring that recipients of funding report to the Legislature jobs created and pay rates, certify that there is no contracting with China or any entity using child labor, that created jobs are over 135% of the prosperity region average, that the return on investment is at least 5-1 and that work is contracted through a competitive bidding process.
Other amendments not related to the Ford investment directly included Rep. Greg Vanwoerkom (R-Norton Shores)’s amendment, which tie-barred SOAR and site readiness funding to several pairs of House bills.
HB 4039 and HB 4040 prohibit sales and use taxes on delivery and installation charges, and HB 4054 and HB 4055 deal with industrial processing of aggregates.
Rep. Jamie Thompson (R-Brownstown)’s amendment proposed allocating $200 million for grants to residents who lost power for more than 48 hours during last week’s ice storm, and would provide $100,000 for the Michigan Public Service Commission to study the cost of upgrading the reliability of the electric grid and identify high-risk areas. Her amendment was not taken up, despite her protest.
The bill was not amended further by the Democratic caucus, meaning it now heads to the Governor’s desk.
