Key facts
- Michigan has spent $6 billion since 2022 on business support and attraction programs.
- Rural areas in the northeast Lower Peninsula received $71 per resident, while the Grand Rapids region received $854 per resident.
- The statewide median for per-resident spending is $525.
- Nearly half of Michigan counties receive less funding than their population share.
- Legislative action has led to reduced funding for key economic development programs.
- Michigan ranks poorly in population growth and per capita income.
Michigan has allocated $6 billion since 2022 to business support and attraction programs through its Economic Development Corp., but a significant disparity in spending has emerged across the state's regions. Rural areas, particularly the northeast Lower Peninsula, have received substantially less per resident compared to more affluent regions like west Michigan. For instance, the northeast Lower Peninsula received only $71 per resident, while the Grand Rapids region received $854 per resident, against a statewide median of $525.
This uneven distribution means 49 of Michigan's 83 counties, many of which are struggling with population loss and lower incomes, are receiving less development funding than their population share would suggest. Tom Wdowik, owner of Sandcastle Beach Resort in Oscoda, expressed concern that his region is often 'overlooked' and suggested more state investment could diversify the economy.
Economist Tim Bartik noted that while some believe distressed areas cannot be helped, he disagrees, emphasizing that economic development should benefit all Michigan residents. MEDC spokesperson Danielle Emerson stated the agency tracks spending by region and responds to local requests, acting as a partner rather than a market driver. The agency does not allocate specific budgets by community but works with local partners to identify project applications.
The findings highlight a long-standing debate in economic development: whether to prioritize geographical fairness or invest where funds can yield the greatest economic return. Growing research suggests a need for increased investment in struggling communities, contrary to the historical focus on major cities. This disparity comes amid scrutiny of Michigan's business growth policies, with data indicating that under Governor Gretchen Whitmer, business incentives have resulted in lower-than-promised job creation and a high number of low-paying jobs. Consequently, legislative bodies have reduced funding for key subsidy programs like SOAR and the MEDC's business subsidy budget.
Bridge's analysis of MEDC spending since 2022, covering grants, small business support, and the Strategic Outreach and Attraction Reserve, revealed regional disparities affecting most of the state's land area. The northeast Lower Peninsula received $14 million (0.24% of funds) for 2% of the population, while Metro Detroit, with 39% of the population, received 41% of the spending. The Grand Rapids region, representing 17% of the population, received nearly 25% of awards.
The discussion on economic development spending occurs as Michigan faces challenges, ranking 49th in population growth and 40th in per capita incomes. Experts like Bartik advocate for targeting areas with lower employment rates, including many rural areas and cities like Flint, to maximize the impact of business growth funding. However, some, like Lou Glazer of Michigan Future Inc., question the overall effectiveness of MEDC's business growth spending in lifting the state's economy.