Lansing — Gov. Gretchen Whitmer vowed Wednesday night that Michigan will dominate the manufacturing of batteries and the production of clean energy and called on lawmakers to retool the state’s economic development programs to achieve the promise.
During her sixth State of the State address, which had a music theme this year, the Democratic governor focused on her priorities for boosting early learning and providing residents with financial “breathing room” through a rebate for new vehicle purchases and a tax credit for caregivers.
“We will build a Michigan where if you get knocked down, you have the support you need to get back up,” Whitmer said. “Lowering costs on the biggest items in your budget, improving education so your kids can thrive, ensuring you can ‘make it’ no matter who you are or what you’ve been through.
“We will deliver real change for people right now and for Michiganders generations from now,” the governor added.
She peppered her speech with references to famous song titles and lyrics, like “Nothing’s Gonna Stop Us Now,” and described the state of the state as “ready to rock.”
“For every sweet child of ours in Michigan, we made school breakfast and lunch free,” said Whitmer, referencing a Guns N’ Roses classic hit while touting a new initiative this school year that she claims saves parents $850 a year.
Whitmer is increasingly viewed as a rising figure within her party nationally. During her address, she said in Republican-controlled Florida, teachers are “disrespected” and book bans are “rampant.” She also credited Democratic President Joe Biden, who is up for reelection, with “bringing jobs and supply chains home to Michigan from around the world.”
“I cannot solve global inflation alone,” Whitmer said at another point. “No one person can — not even the president. If you meet someone who says they have a secret plan to fix inflation, run the other way.”
The speech came as Michigan’s leaders have prioritized combating the state’s weak population growth and amid ongoing concerns about the impact of inflation on residents’ pocketbooks.
Whitmer invited parents in other states to “come to Michigan” as part of a pitch of her proposals to make 4-year preschool free and guarantee two years of free community college to any high school graduate.
And she endorsed a variety of new and reworked economic development incentives Wednesday that her administration hopes will grow jobs in the state, including a so-called “High-wage Incentive for Regional Employment (HIRE) in Michigan” program.
That initiative would allow participating businesses to keep a portion of state income taxes generated by newly hired employees.
The governor said she also wants to create a tax credit for research and development and to establish an “Innovation Fund” to invest in “high-growth startups that will create the future, right here in Michigan.
“Together, we’re going to build the infrastructure for innovation so founders can start and build their companies here in Michigan,” Whitmer said.
Afterward, House Minority Leader Matt Hall, R-Richland Township, countered that Whitmer’s plans amounted to “tactics” and not an overall, cohesive economic development strategy.
“These funds can help you close a deal,” Hall said. “But when you make it more expensive to do business, then you’ve got to write a bigger check.”
Michigan Economic Development Corp. CEO Quentin Messer said more economic development tools are needed to supplement Michigan’s Business Development Program Grant, which is capped at $10 million per project, and the Strategic Outreach and Attraction Reserve fund, which is used for larger-scale projects.
The two programs function as “a small hammer and a big hammer,” with few tools to address those opportunities that don’t exactly match the qualifications, Messer said.
“We need to make sure we have the ability to attract and retain R&D, headquarters jobs, those jobs that have higher income levels,” Messer said.
Whitmer will likely need Republican support to advance the job-creation incentive ideas into law. Democrats currently control the state Senate, and there’s a temporary 54-54 split in the state House. Some Democratic legislators have previously opposed programs they view as corporate welfare.
House Majority Floor Leader Abraham Aiyash said the research and development credit program looks to be promising. But the Hamtramck Democrat stressed that any conversations regarding economic development tools need to assess whether there is a worthwhile return on investments.
“We have to make sure that any money we’re investing is not simply giveaways for corporations,” Aiyash said.
U.S. Census Bureau estimates for 2022 showed that Michigan had the 49th slowest rate of population growth among the 50 states since 2000 — only beating West Virginia, which lost population.
Senate Minority Leader Aric Nesbitt, R-Porter Township, argued Wednesday that Democrats’ 2023 repeal of Right to Work, a law that made union membership optional at unionized workplaces, signaled they weren’t serious about economic development.
Cutting costs
During her address, Whitmer said she can’t solve global inflation alone but wants to make life more affordable for residents by lowering costs on “the biggest items in your monthly budget,” such as child care, transportation, utilities and education.
Michiganians, the governor said, “need more breathing room.”
She highlighted plans to invest in new housing and a proposal to create a tax credit for people who serve as caregivers for aging or ailing family members.
The Caring for MI Family Tax Credit would save thousands of Michigan families up to $5,000 on their taxes, Whitmer said.
She said the state will invest almost $1.4 billion to build or rehabilitate nearly 10,000 homes.
Aiyash said housing investments like those advanced by Whitmer on Wednesday were critical for the state, but improvements in public transit also are needed for Metro Detroit.
Whitmer also used the speech to push for a rebate to lower the cost of buying a new car with a $1,000 rebate off any car and $2,000 for electric vehicles. Both rebates would increase by $500 if the vehicle is made at a facility where a labor union represents workers — a nod to Whitmer’s supporters in the United Auto Workers union.
State Sen. Mike Webber, R-Rochester Hills, said he was in favor of a broader tax cut for Michigan residents.
“No government program that gets started can be as efficient as people just keeping money in their pocket and being able to figure out how they want to spend it,” Webber said.
More: State of the State: For Michigan, long-term economic tests abound
More: Michigan Gov. Whitmer to propose funding free preschool, community college for all
More: State of the State: Whitmer to push for reviving job creation program
‘Broadening our vision’
Whitmer laid out a plan Wednesday for a new “Michigan guarantee.”
“Every single Michigander can count on a free public education from pre-K through community college,” Whitmer said.
On Wednesday, Whitmer asked state lawmakers to offer free preschool for all 4-year-olds and two years of free community college for all high school graduates. Both initiatives would mark the culmination of past efforts by Whitmer to gradually expand access to early learning and post-secondary education and would ease the state’s efforts to promote the programs.
There’s real value in people understanding that school in Michigan begins at age 4 instead of 5 or 6, said Michael Rice, Michigan’s superintendent of public instruction.
“I think it’s a cultural shift,” Rice said.
In the current state budget, lawmakers increased funding for the preschool Great Start Readiness Program by $90 million, about 20%, and shifted the eligibility threshold from 250% of the federal poverty guideline to 300%. For 2023, a family of four making about $90,000 would be at about 300% of the guideline.
Under the new proposal from the governor, all Michigan 4-year-olds could go to preschool for free.
State Rep. Phil Green, R-Millington, said Whitmer’s speech on education didn’t provide additional accountability but just proposals to spend more tax dollars.
“We have to deal with systemic problems,” Green said.
Amanda Smith is a dedicated U.S. correspondent with a passion for uncovering the stories that shape the nation. With a background in political science, she provides in-depth analysis and insightful commentary on domestic affairs, ensuring readers are well-informed about the latest developments across the United States.
