The clock is ticking on long-term funding for one of Michigan’s major corporate welfare schemes, which has largely been used to support electric vehicle production.

Coining Gov. Gretchen Whitmer’s “Make it in Michigan” motto, the Strategic Outreach and Attraction Reserve fund awaits an overhaul and could be renamed that under proposed legislation. There is growing bipartisan support to rein in the incentives awarded through the SOAR Fund.

The verdict is still out on one of the high-profile packages before the Legislature and whether lawmakers will take it up during lame-duck session. House Bills 5104 through 5107, along with Senate Bills 559, 560, 562 and 569, would rename SOAR the Make it in Michigan fund.

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House Republicans have been dismissive of the SOAR program overall. They introduced a set of bills in October 2023 to improve oversight of the SOAR Fund. These proposals included audits of all payouts, tougher transparency requirements, and clawback funds to hold recipients accountable.

“SOAR is an objective disaster and it should be repealed,” Sen. Thomas Albert, R-Lowell, told MPR.

In June, Republican State Rep. Sarah Lightner, R-Springport, issued a statement after voting against transferring funds from the SOAR Fund for several economic development projects. They argue the SOAR program fails to provide necessary safeguards and oversight required to ensure that companies deliver on their promises.

“The lack of information surrounding most of these projects is deeply troubling and unacceptable,” Lightner said in the release. “Michigan taxpayers have the right to know exactly how their money is being used, and they expect real, measurable outcomes from these investments.”

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The package aims to transform SOAR with new, long-term appropriations and corporate subsidies to incentivize certain industries, yet it has met resistance from Republican lawmakers.

The proposed legislation would provide an annual $600 million appropriation for the fund through the year 2034-2035. The restructured program would use half of SOAR money and spend it on community investments. The package of bills would allocate up to:

  • $250 million annually for the Make it in Michigan fund, a rebrand of the SOAR Fund
  • $200 million annually for the Michigan Mobility Trust fund, a new program for public transit and public development projects
  • $100 million annually to the Housing and Community Development fund, a program aimed at addressing affordable housing shortages in the state
  • $50 million annually to the Revitalization and Placemaking fund, a program targeted at community revitalization and rehabilitation

Created in December 2021, the SOAR Fund was designed to boost business growth and job creation. The state allocated $500 million to SOAR for 2024, with funding for the Critical Industry Program and the Strategic Site Readiness Program.

CIP provides grants for capital investments related to infrastructure improvements, the purchase or acquisition of heavy machinery, and job training initiatives. The SSRP targets investment-ready sites to attract and promote investments for eligible activities.

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The SOAR Fund faces uncertainty after the 2025 fiscal year. The new funding formula would run for 10 years. As it stands, the proposed legislation has failed to gain support from Republican House or Senate members and stalled in both chambers.

Lawmakers established the SOAR Fund after Ford Motor Co. nixed Michigan to invest $11.4 billion in battery and electric vehicle assembly plants in other states. The state has subsequently used SOAR funding to subsidize the state’s EV mandates,  EV battery production, and other projects from automakers, according to Michigan Public Radio.

Critics have argued SOAR handouts are used for “favored businesses” that Republicans have opposed, like a battery plant planned for the Big Rapids area that would be owned by Gotion Inc., a subsidiary of a Chinese company with direct ties to the Chinese Communist Party.

“Subsidizing select companies is ineffective at creating jobs, unfair to businesses who don’t get special deals, and expensive to the state budget,” Mackinac Center for Public Policy Fiscal Director James Hohman told The Midwesterner. “The bills would make an already wasteful program even more expensive. When the state signs business subsidy deals, the bills would have them set more money aside to give to local governments for pork projects.”