After subsidy failures, Whitmer calls for more subsidies

Gov. Gretchen Whitmer spoke Wednesday at the Detroit Auto Show, urging lawmakers to create more taxpayer-funded jobs programs, just weeks after a new study found such programs often fail to create jobs.

The governor encouraged a divided Michigan Legislature to renew a taxpayer-funded jobs program that’s set to disappear in a year.

Whitmer also urged legislators to develop a long-time solution for road maintenance, as her $3.5 billion bonding plan ended in December without completing her campaign promise to fix the roads. Her plan only fixed state trunkline roads, not local and county roads.

“Losing both (a road program and a jobs program) without better, more comprehensive replacements will throw us off track,” Whitmer said.

Whitmer called for taxpayers to fund a new Michigan auto jobs fund. She also called for a new payroll tax cut for Michigan-based hires, more site-development programs, more public spending on housing and brownfield redevelopment, and more spending on transit, buses, rail and roads.

The governor, a Democrat, must work with the Republican-controlled House of Representatives on any legislative plans.

House Speaker Matt Hall, R-Richland Township, said he wants to fix roads, giving priority to local and county infrastructure, without raising taxes, spokesman Greg Manz said in a news release.

“That’s the plan he put forward then — and it’s the plan that remains on the table now,” Manz said in a statement. “We’re hopeful the governor will finally see that a pothole-free path doesn’t require further burdens on hardworking Michigan families.”

Whitmer’s speech suggests she disagrees with that approach.

“To my friends in the GOP, fixing the roads in a sustainable way means looking for new, fair sources of revenue,” Whitmer said. “We can’t just cut our way to better roads.”

Hall’s road plan hinges on directing $2.8 billion from existing tax revenue toward fixing roads. It would allocate $1.2 billion of corporate income tax revenue to infrastructure, add $600 million in additional funding in 2026, and direct state gas revenue entirely to road funding.

The $600 million would come by cutting current earmarks: $500 million for the Strategic Outreach and Attraction Reserve Fund that pays for corporate incentives, $50 million for the Revitalization and Placemaking Fund, and $50 million for the Housing and Community Development Fund.

County road agencies maintain roughly 75% of Michigan’s road miles, which means 90,500 miles of roads and 5,900 bridges, according to the County Road Association of Michigan.

Hall’s road funding plan challenges Whitmer’s strategy of using subsidized businesses as a way to create prosperity. Since 2023 Michigan has given $4.6 billion in subsidies to select, favored corporations.

Only one of every 11 jobs promised by Michigan politicians and public officials actually gets created, according to a study by the Mackinac Center for Public Policy.

The study found that only 9% of the jobs mentioned in announcements about state-backed deals were created. It followed two decades of front-page news stories about government grants to private businesses.

Even the Detroit Auto Show received $8 million of taxpayer funds in the 2024 budget, CapCon reported.