(Published 09/20/2022) The Whitmer administration wants the Legislature to put another $500 million into the new Strategic Outreach and Attraction Reserve (SOAR) Fund to keep the ball rolling on major economic projects, but the House Republicans aren't sold on the request until they can get a tax cut as part of the deal.
The Legislature started the SOAR fund with $1 billion, a majority of which was used to lure General Motors to build an electric vehicle plant in Delta Township. Now, with only $233.1 million left in the fund, the money will lapse if not spent by year's end. Apparently, the Michigan Strategic Fund has a project or two in mind on which to spend the money, and the Senate isn't opposed to it.
The Senate Republicans want additional money set aside for work on some sites that happen to be in the districts of some key members. What is left in the SOAR Fund won't pay for everything the Governor and the Senate want.
House Appropriations Committee Chair Thomas Albert (R-Lowell) has been a hard no on the spending absent an overall plan on what to do with the remaining $7 billion on the balance sheet, but House Speaker Jason Wentworth (R-Farwell) is willing to deal on a smaller plan as long as there's a tax cut piece in the overall puzzle.
Meanwhile, Gov. Gretchen Whitmer is watching the clock tick by.
“The interest in doing business in Michigan has increased dramatically because of that initial deposit and we want to maintain that momentum, allowing us to continue to secure transformational projects to diversify and grow Michigan's economy, said Budget Office spokesperson Lauren Leeds.
Senate Appropriations Committee Chair Jim Stamas (R-Midland) said today he would like to see more investment into infrastructure as it relates to economic development projects as the Senate did today (see related story).
The $500 million number the Governor threw out was a little steep for Stamas, but did say, “If there's any other very narrow things that really have to be done prior to the election than we should look at them. Other than that, I'd like to see it stay very, very narrow, far more focused on infrastructure.”
Thomas Township Looking At New Sewer To Accommodate Hemlock Expansion
The chances Thomas Township in Saginaw County will receive $375 million investment from Hemlock Semiconductor Operations (HSC) is looking more likely after the Senate Appropriations Committee set aside $27 million to help expand the community's wastewater treatment system.
The Senate panel this morning approved the transfer into the Michigan Strategic Site Readiness Program, one of the buckets of money it created last year to lure business development to the state. HSC is the longest operating and only domestically headquartered manufacturer of polysilicon in the world.
The project is expected to create 180 new jobs.
Senate Appropriations Committee Chair Jim Stamas (R-Midland) said it's still unclear if agreement can be found between the Governor's office and the House on a mid-year supplemental budget before the election.
Since the Michigan Strategic Fund board-approved project is "ready to go" and has universal support, the decision was made to move forward with it through the transfer process.
Sen. Tom Barrett (R-Charlotte) opposed using Strategic Outreach and Attraction Reserve Fund to lure General Motors into building in Michigan because he didn't like the idea of taxpayers' money going directly to corporations. This project, however, is an improvement to a community's infrastructure system so he was a "yes" vote.
"This is not a direct subsidy. This is an example of how government should be working to attract business in the appropriate way," Barrett said.
The transfer was approved 15-1 with Sen. Jim Runestad (R-White Lake) casting the lone no vote. His only comment during committee was that he was surprised that the transfer request was coming through the Michigan Strategic Fund and not the community.
MEDC CEO Quentin Messer Jr., Thomas Township Manager Russell Taylor and Saginaw Future Vice President Tom Miller all spoke in support of the transfer. It was noted during testimony that Thomas Township lost as many as six prospective projects in recent years because the sewer system couldn't accommodate an increase.
The House Appropriations Committee will still need to sign off on the transfer for it to take effect.
The Senate Appropriations Committee also approved two other transfers today. Transfer request 2022-2, 2022-3 moved around $5 million and $234 million respectively within state government. Of that latter request, $216 million of it was Federal Emergency Management Agency (FEMA) money going to pay for state government's COVID-19 response.