• State House lawmakers are proposing two new bills that would abolish the agency in charge of business growth
• The legislation follows other MEDC-ending legislation proposed last week in the state Senate
• Gov. Gretchen Whitmer says she will veto the bills if they pass to protect Michigan’s economy

One month after lawmakers chopped Michigan’s economic development spending, the state agency in charge of business growth now faces dismantling via newly proposed legislation in both chambers of the Legislature.

The moves keep unprecedented pressure on the Michigan Economic Development Corp., which has been increasingly criticized by Republicans and some Democrats as secretive, costly and ineffective.

Gov. Gretchen Whitmer vows to veto the MEDC-ending legislation if it reaches her desk to “prevent these bills from destroying the economy,” spokesperson Bobby Leddy said.

On Wednesday, two bills presented by a group of state House Republicans seek to halt the MEDC’s authority and shut down the interlocal agreements that give the MEDC statewide reach.

The MEDC is “beyond repair,” said state Rep. Jay DeBoyer, R-Clay Township and chair of the House Oversight Committee, in making the announcement.

Cash-for-job subsidies during the Whitmer administration show about 20% of the 65,000 jobs promised were delivered, according to a Bridge Michigan investigation this year. 

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Beyond that, several high-profile deals through the $2 billion Strategic Outreach and Attraction Reserve (SOAR) fund collapsed in recent months. The state declared Gotion Inc. in default of its $175 million incentive award over stalled progress at a battery plant near Big Rapids and Sandisk decided not to build a multibillion-dollar semiconductor plant in Genesee County after the state spent $260 million on the land.

“It is time to fundamentally start over and go forward with methods of economic development that are forthright, efficient and truly provide a return on tax dollars,” DeBoyer said. “What we have seen from MEDC should not and cannot be the status quo in state government.”

However, supporters point to the MEDC’s ability to navigate potential job growth deals among national competitors. A recent ranking by CNBC put Michigan in the top 10 states for business.

“The Republican plan would put a ‘closed for business’ sign at Michigan’s border with Ohio and Indiana, killing good-paying jobs and shuttering small businesses across the state,” Leddy said in a statement.

He added: “These bills are a waste of time, and they are dead on arrival.”

The MEDC’s 2025 budget includes revenue of $83.7 million, most of it from tribal gaming revenue. It employs 366 and last year oversaw $1.6 billion in state funds in addition to its own funding.

The House bills would allow existing agreements to continue, while also retaining the MEDC’s public funding arm, the Michigan Strategic Fund.

The bills focus on “the gut of corporate giveaways and their failure,” said state Rep. Steve Carra, R-Three Rivers, co-sponsor and chair of the House subcommittee targeting incentive deals.

The bills would provide “no money and no authority to negotiate new deals with companies,” Carra said.

Carra added that lawmakers have varied opinions about business attraction and that the legislation — proposed by the majority party — are expected to allow a reassessment.

The House proposals follow a 53-bill package introduced last week by state Sen. Thomas Albert that also would eliminate the MEDC and reshape the state’s approach to job creation.

Albert’s plan would create a Bureau of Fair Competition and Free Enterprise that would employ an independent compliance officer to monitor state spending on economic development.

Both Albert and House Republicans focused on the MEDC’s cash-for-jobs deals, including SOAR, which went unfunded in this year’s budget after over $2 billion in megadeal awards.

House Speaker Matt Hall, R-Richland Township, told reporters recently that he wants to see SOAR abolished and not just de-funded. He also hinted at broader economic development reforms coming this session.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, has not publicly discussed that chamber’s economic development direction.

In shutting down the MEDC, Albert said, the state should “retain only those programs with a proven track record and ensure decision-making for taxpayer-funded projects has accountability.”

MEDC, created in 1999, is a public entity, but the corporation is legally separate from the state and maintains its own internal controls.

The state considers the MEDC one of five “authorities,” according to Michigan’s annual report. It is housed within the Department of Labor and Economic Opportunity.

Besides cutting SOAR, this year’s budget eliminated about $90 million in state funding to support job growth, community revitalization, small business loans and investment funds. The MEDC also runs state historic preservation, an intern program and tourism marketing.

The MEDC says its programs and services trained and placed more than 5,950 workers and more than 1,480 interns last year, in addition to aiding more than 2,000 new businesses. It also aided small businesses to secure over $2.7 billion in new revenue, according to a spokesperson.

If lawmakers approved bills to eliminate the MEDC but Whitmer rejected them, the Legislature could override the veto with a two-thirds vote in each chamber. The Senate has 38 voting members, with 19 Democrats and one vacancy. The House has 110 voting members, with Republicans holding 58 seats.

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