A Bipartisanship Win in Lansing — For Corporate Subsidies

by Joel Batterman

This article was originally published in Michigan Left on February 17th, 2022, by DSA member Joel Batterman.

Republicans and Democrats in Lansing certainly have their differences. But there are some areas where they’ve found common ground: like agreeing to throw public money at some of the biggest corporations on the planet.

Last December, a broad bipartisan coalition of Republicans and Democrats in the Legislature came together to create the “Strategic Outreach and Attraction Reserve” (SOAR), which Governor Whitmer’s office described as “a package to support small businesses and fully fund a historic economic development toolkit.”

That statement needs a little translation. “Toolkit” refers not to a box of hardware but to a billion-dollar subsidy fund that will give direct grants to businesses. And which “small businesses” are those?

Well, one is a mom-and-pop outfit out of Detroit called General Motors. (You may have passed their little storefront down by Hart Plaza.) GM, which projects $14 billion in earnings in fiscal year 2021, has now been awarded the appropriately Faustian sum of $666 million in SOAR money to expand a plant in Delta Township, outside Lansing.

Korean manufacturer LG Chem (2020 profits: $900 M) is also seeking SOAR subsidies for an expansion of its battery plant in Holland, MI, which supplies batteries to GM. The plant received some unwanted attention last year when some of its batteries in Chevy Bolts started to catch fire. (Workers at the facility report that the pay is not bad, but not everyone’s thrilled about the 12-hour days.)

Read on to find out how your legislator voted on the SOAR program.

Which Side Are They On?

If you take a look at the Michigan Democratic Party platform, you’ll find the following statement:

“[T]ax incentives to attract business and investment are a downward spiral of ever decreasing tax receipts from business, forcing individual taxpayers to make up the difference — or accept ever decreasing services from their governments.”

In fact, as State Representative Yousef Rabhi (D-Ann Arbor) noted, the state is already on the hook for other corporate subsidy programs created over the past several decades.

“We have been giving our auto manufacturers half a billion dollars, on an annual basis, through the MEGA [Michigan Economic Growth Authority] tax credit program, and yet they’re still moving factories to other states,” Rabhi said. “Does this seem fair to you?”

Unfortunately, that didn’t stop a large majority of the Democratic Caucus in Lansing from voting for the SOAR subsidies, or Governor Whitmer from signing them into law.

Among the Democrats favoring the subsidies was State Sen. Adam Hollier (D-Detroit), who gave a floor speech urging his colleagues to support SOAR to ensure that electric vehicle batteries and chips are “made in your district, they’re made in my district, and they’re designed by our children in our communities.” (For the record, GM has not released any plans to manufacture either chips or batteries in Hollier’s Detroit district.) Hollier is now running for Congress on a platform touting, among other things, “small business investment.”

In fact, the majority of “no” votes came from Republicans, thanks to aggressive lobbying against the proposal from the Mackinac Center for Public Policy, which at least had the consistency to stick with its libertarian principles on the issue. “The state’s new SOAR program should make everyone sore,” quips one of the Mackinac analysts.

You won’t find a list of how legislators voted on the SOAR subsidies in any publication I know of. Michigan Left is therefore glad to offer one, pulled from the depths of the Legislature’s website.

In the state House, just 6 of 51 Democratic state representatives voted “no”:

Aiyash (D-Hamtramck)

Hammoud (D-Dearborn; now Dearborn Mayor)

Johnson (D-Detroit)

Pohutsky (D-Livonia)

Rabhi (D-Ann Arbor)

Thanedar (D-Detroit)

In the state Senate, just 3 of 16 Democrats voted “no”:

Chang (D-Detroit)

Geiss (D-Taylor)

Irwin (D-Ann Arbor)

These legislators deserve our thanks. Those who voted “yes,” as well as Governor Whitmer, need to be asked about their reasoning.

Hundreds of thousands of Michigan residents live in poverty. Cities across the state have lead-tainted water. We’re 41st in the nation in starting pay for teachers. Our roads are crumbling and public transit is infrequent where it exists at all. Are we really likely to change that with more handouts to corporations?

As this was being written, Governor Whitmer announced she was including an additional $500 million for SOAR in her proposed budget.

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