The state of Michigan has bet big on incentives to bring corporations and business to the state. Candidates to be next governor, on both sides of the aisle, are pushing to change that strategy, with the Michigan Economic Development Corporation coming under fire on the campaign trail.
“The best state to live, work, and invest”
Under Governor Gretchen Whitmer, the state has spent billions on incentives, including a $2.4 billion fund (SOAR) to attract business. The Michigan Economic Development Corporation is the state agency that manages this spending.
In 2024, Dow Chemical received a grant of $120 million from the MEDC for facility upgrades in exchange for keeping 5,000 jobs in the state through 2032. That project is held up as a successful example of the strategy in action.
“Together, we will pursuing our comprehensive economic development strategy to make Michigan the best state to live, work, and invest,” Whitmer said in a 2024 statement.
“Broken commitments and wasted public dollars”
Yet criticism of the MEDC persists, critics and analysts say it hasn't created many new jobs altogether.
A Bridge Michigan analysis says in 2025, the SOAR fund created around 1,800 new jobs in 2025 and retained another over 5,000 with the Dow grant. That was well short of a promised goal of nearly 20,000 jobs.
Lawmakers on both sides of the aisle got together and defunded the $2.4 billion fund for this fiscal year.
In addition, critics say the MEDC has not been a good steward of money.
Critics point to an EV battery plant that was supposed to be built in mid-Michigan by a Chinese tech company Gotion. It fell through because of local backlash over the companies ties to the Chinese Communist Party.
The state is looking to recoup $23.7 million it had given to Gotion. The company has refused and is looking to sue the township for the same amount, among other damages.
“Taxpayer funded incentive deals often fail to deliver on promises, leaving our communities with broken commitments and wasted public dollars,” said State Rep. Tom Kunse (R-Clare). "Promises of jobs and investment mean nothing if companies cannot meet their obligations.”
Eric Lupher is the president of the Citizens Research Council, a non-partisan think tank. He says state officials and local communities are often not communicating about projects.
“The relative lack of collaboration in Michigan between the levels of government in some cases hurts us,” he said.
“Trying to pick winners”
Republican gubernatorial candidates, Perry Johnson and John James have criticized the MEDC and want reforms.
Johnson has called for an audit of the MEDC, saying he wants asses the “true return on investment,” of its subsidies. James also wants to fully end SOAR and audit all state expenditures for the past ten years, including the MEDC.
Both candidates say lowering taxes and regulations will lead to more growth. With James telling Bridge Michigan, he wanted more focus on retention and working with small business.
Former Attorney General Mike Cox supports ending the MEDC.
“Instead of trying to pick winners, we ought to just try and lower the burden on everyone, and the best businessmen and women will prevail and create more jobs right here in Michigan,” he told WCMU.
Democratic front runner and Secretary of State Jocelyn Benson says the state should focus on workforce development, and apprenticeships.
She said the state needs to focus on increasing access to jobs in “growing industries” like biotech and climate tech and others like healthcare and tourism.
“Workforce development and talent retention is going to be key to attracting the best employers to our state, far more than any incentives have shown to be,” she told WCMU.
Her primary opponent, Chris Swanson, the Genesee County Sheriff, said he would “audit and restructure” the MEDC on his campaign website.
“Our nearby competitor states are offering them”
The MEDC points to success stories across the state amid the political criticism.
They say they generated $2.87 billion in revenue for small businesses last year and are responsible for more than just business incentive programs. The MEDC is also responsible for Community Revitalization, the state’s “Pure Michigan,” tourism campaign and an already existing talent and retention campaign.
They have a project list online that says they've secured 10,420 commitments for jobs across 698 projects statewide for this fiscal year.
Ultimately, Lupher says, Michigan needs a strong economic strategy because other states are offering their own incentives.
“Our nearby competitor states are offering them, and we're not, then we're not playing on a level playing field,” he said.
Rick Brewer contributed to reporting on this story
