Sen. Albert introduces plan to fight corporate welfare, bring accountability to Michigan economic development efforts

Sen. Albert introduces plan to fight corporate welfare, bring accountability to Michigan economic development efforts

LANSING, Mich. — Sen. Thomas Albert on Tuesday introduced proposals to combat corporate welfare and reform economic incentive practices that are failing Marshall and other Michigan communities.

Albert’s legislation comes in response to the reckless growth and flawed processes related to the Strategic Outreach and Attraction Reserve (SOAR) Fund, which has lacked transparency, accountability and return on investment for taxpayers. His plan is contained in Senate Bills 520526.

Highlights of Albert’s plan include:
• Repealing the SOAR Fund: Eliminates the Strategic Outreach and Attraction Reserve Fund because the program is not working as intended and is failing taxpayers.
• Saving taxpayer money: Eliminates the corporate income tax earmark of up to $500 million a year for the SOAR Fund, returning the money to the general fund.
• Restoring accountability: Bans elected state and local officials from signing non-disclosure agreements related to economic development projects using public funds and requires monitoring of SOAR projects through the Economic Development Incentive Evaluation Act. The Incentive Evaluation Act was created by an Albert bill in 2018 to independently examine whether specific economic development programs are worth the cost to taxpayers.

Albert originally supported SOAR but has consistently voted against funding the program and its escalating project costs since late last year.

“SOAR was intended to promote top-quality investments while increasing transparency and improving communication with lawmakers — but that is not what has happened. When experience is opposite of expectations, it is prudent to change course,” said Albert, R-Lowell. “This bloated program has spiraled out of control with no accountability, transparency or evidence that it’s worth the cost.”

SOAR started with an overall $1 billion investment, and the first projects approved were largely related to brownfield or already existing manufacturing sites. SOAR-related allocations have since doubled, and Democrats have approved corporate income tax designations that will increase program funding even more. Some projects have excessive costs, target greenfields and have ties to unfriendly foreign nations.

Albert pointed to a project in Marshall as evidence of SOAR’s failure. The state approved $1.7 billion in public incentives for the project — or roughly $680,000 for each direct job that would be created at the factory. Land has been bought and some of it cleared, only to have Ford announce this week that the project is paused and no final determination on whether it will proceed has been made.

“I have opposed this project from the start in large part because of its high costs. Taxpayers would likely never see an adequate return on investment for this project,” Albert said. “Beyond that, the SOAR process puts the cart ahead of the horse. The lives of many Marshall area residents have been upended or put on hold. Taxpayer money has been allocated. And now Ford doesn’t even know if it will proceed with the project. This negligence and shocking lack of accountability hurts taxpayers and residents — and it is further evidence that SOAR is beyond saving. This broken program should be disbanded.”

Albert’s plan also would bring some much-needed transparency and accountability to the economic development process in Michigan — including a ban on non-disclosure agreements for elected state and local officials when public funds are involved.

Albert signed a non-disclosure agreement last legislative term in his role as the House Appropriations Committee chair. He rescinded that agreement, and it is no longer in effect as of the beginning of this legislative term.

“Based on my own experience, I see no benefit in non-disclosure agreements,” Albert said. “I learned nothing of value from the NDA. Instead of fostering true communication with legislators, NDAs tie their hands and add to a culture of secrecy. We need changes to improve public oversight and communication related to economic development projects at every level of government, and eliminating non-disclosure agreements for elected officials would be a step in the right direction.”


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