Democratic State Senators unveiled a set of bills aimed at redefining Michigan’s approach to economic development. Since assuming leadership of the Fund MI Future coalition in January, Executive Director MoReno Taylor II has engaged with residents and community leaders throughout the state. The consensus indicates a pressing need for revenue reform, encompassing a comprehensive review of tax structures for affluent individuals and corporations. Moreover, there’s a growing call to reevaluate the economic development strategy, shifting away from an over-reliance on tax incentives. Taylor highlights concerns regarding the efficacy of the current funding mechanisms for local governments and public services. “One thing has become abundantly clear: we need structural revenue reform, which means a holistic re-imagining of tax rates for the wealthy and corporations, and a new approach to economic development that doesn’t rely on tax breaks,” he said. “The way we are currently funding local governments and public services is NOT working for the majority of Michiganders.”
Earlier in the year, the introduction of the Strategic Outreach and Attraction Reserve (SOAR) Fund package drew criticism from various sectors who anticipated a more community-focused allocation of tax revenues. Over the past 30 years, some have observed a trend in Michigan: while there’s been reduced investment in local communities and public infrastructure, considerable incentives have been provided to major multinational corporations. Reportedly, corporations contribute about 3.5 percent to Michigan’s revenue, yet receive a significant portion of state tax dollars annually. Advocates like Taylor argue for a reallocation of these funds directly to benefit Michigan communities and its residents.
“The conversation on how we shift our public tax dollars into corporate pockets and the benefit or lack thereof that we receive is long overdue. I look forward to highlighting the urgent need to invest our public tax dollars into public services and infrastructure,” Taylor said in a recent Instagram post.
In response to these concerns, Michigan’s Democratic Senators have proposed reforms. By transitioning SOAR into the “Make It In Michigan Fund” and initiating the “Michigan 360” fund, they aim to address the state’s economic challenges. Local governments have been lauded for their innovative strategies to sustain public services amidst revenue challenges and changing economic conditions. However, many contend that the state capital, Lansing, has progressively reduced their funding support.
According to a recent CRC Report called “Michigan’s Path to a Prosperous Future, Taylor shared, “We need “bold and broad action.” That starts with acknowledging that the way we are currently operating is not working and figuring out real solutions to put our state on more solid footing. Using 20 percent of subsidies awarded to address local community issues and “aligning our economic development tools around the prosperity of residents” is a big step in the right direction, and we look forward to more bold initiatives and conversations in the future.”
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