Kirby Lee via AP
A proposed $250 million corporate subsidy would go to redevelop the GM Renaissance Center in Detroit, seen here in December 2023.
Two states lost Democratic trifectas in the 2024 elections. Minnesota has not convened a special session to take advantage of the final moments of Democratic control, though lawmakers did use their thin majorities throughout 2023 and 2024 to make major policy advances.
By contrast, Michigan is holding a year-end legislative session, which resumes today. But so far, Democrats have used it primarily to hand over large subsidies to some of the biggest companies in America: Google and Microsoft, Ford and General Motors, and more.
Corporate giveaways that have passed or are expected to in the lame-duck session could push Michigan’s subsidy bill for 2023-2024 as high as $10 billion, around $1,000 for every resident, during the first total Democratic control of government since 1984. “It’s closer to Reaganomics than any left-leaning policy,” said Sean McBrearty, state director for Clean Water Action Michigan. Meanwhile, bills dealing with housing, criminal justice reform, environmental health, and other priorities have been delayed, and could run out of time.
Michigan activists have been joined in their frustration with the Democratic leadership by rank-and-file lawmakers. “It’s mind-blowing,” said Rep. Dylan Wegela, who represents part of Wayne County outside of Detroit. Wegela cited a proposed $250 million corporate subsidy to redevelop GM’s iconic Renaissance Center headquarters in Detroit, something even Republican Speaker-elect Matt Hall has criticized. “He said we should use that money for public infrastructure,” Wegela said. “I thought, that’s something Democrats should be saying!”
Wegela was recently censored by his own caucus leadership, blocked from sending portions of a constituent letter that was critical of DTE Energy, the state’s largest utility. “Instead of the government holding DTE accountable, your rates rise,” Wegela intended to say in the constituent letter. “You feel it when infrastructure projects take too long or needs are neglected because instead money has been given as tax breaks and cash payments to multibillion-dollar corporations.”
Betsy Coffia, a progressive Democrat in the rural Upper Great Lakes region who won re-election this year by more votes than in 2022, has also been among the openly critical. “Red team or Blue team, Big Corps run Michigan,” Coffia posted on X. “I said what I said.”
Corporate giveaways that have passed or are expected to in the lame-duck session could push Michigan’s subsidy bill for 2023-2024 as high as $10 billion.
Gov. Gretchen Whitmer (a 2028 presidential contender), state Senate leader Winnie Brinks, and House Speaker Joe Tate have taken a lot of blame for the situation, which has poisoned assessments of Democrats’ fleeting brush with power in Michigan. “What everyone will tell you is that the caucus is totally in disarray,” said William Lawrence, a statewide organizer with Detroit Action. “The leadership is not going to leave us with anything to work with to re-elect a Democratic legislature in the future.”
With just weeks left until Republicans take control of the state House, and looming concerns about President-elect Donald Trump’s aims, the decision to spend political capital on corporate handouts has caused despair and puzzlement. But when I asked advocates, lobbyists, and state lawmakers in Michigan why Democrats have set priorities in this fashion, one word came back.
“Money,” said Rep. Emily Dievendorf of North Lansing. “The special interests that have invested, to a great extent that has been a good investment. We’ve done a lot of work on corporate incentives, trying to bring bigger business here. When it comes to common purpose and needs, and legislation that represents our values, it does not have a wealthy enough lobbying effort.”
MICHIGAN DEMOCRATS OPENED THE TRIFECTA with an unusually productive first hundred days, as lawmakers, nearly half of whom in the House were freshmen, provided a burst of early energy. They advanced repeal of the state’s anti-union right-to-work law and its 1931 abortion ban, employment and eviction protections for the LGBT community, expansion of the state’s Earned Income Tax Credit, several gun safety measures, and the elimination of a tax on pensions. Democrats later boosted education budgets, introduced universal school breakfast and lunch, and advanced an energy package that includes a 100 percent renewable-energy standard by 2040, streamlined permitting for clean-energy projects, improved energy efficiency, and created an office to support a just transition for workers.
But little has happened since that 100-day run. And alongside all that was a series of what are euphemistically described as “economic development” deals, where large subsidies are offered in exchange for relocating factories, headquarters, and jobs.
According to Good Jobs First, which tracks economic development subsidies nationally, Michigan led the nation with $2.8 billion in “mega-deals” (defined as subsidies worth $50 million or more) in 2023. This included $1.7 billion for a Ford electric-vehicle battery plant in Marshall, $800 million for a real estate development project in Detroit, and $237 million for upgrades at a paper mill. In some cases, the perks go on top of existing federal tax credits from the Inflation Reduction Act or CHIPS, which have been sufficient to spur industrial development across the country.
Greg LeRoy, with Good Jobs First, noted that Michigan has almost always topped the list of states for economic development subsidy deals. “It’s a chronic problem of overspending/special interest capture” dating back 30 years, he wrote in an email to the Prospect.
Carlos Osorio/AP Photo
Michigan Gov. Gretchen Whitmer addresses business leaders, December 20, 2021, in Detroit. Whitmer has been criticized for prioritizing corporate giveaways in the state.
Handouts continued in 2024, with deals like a $250 million subsidy to develop an advanced manufacturing site in Mundy Township. The Mackinac Center, a conservative public-policy outlet, put the number for 2023 and 2024 at $4.6 billion before the lame-duck session, including grants and incentives to General Motors, Corning, Our Next Energy, Highland Copper, and Hemlock Semiconductor.
That was before the data center bill came back. In May, seeking to capitalize on the need for more computing power to run artificial-intelligence systems, the Michigan Senate passed a bill giving data centers with at least $250 million in capital investment an exemption from sales and use taxes on equipment. Environmental groups were angered about devoting money to facilities that demand enormous electricity and water usage but generate few jobs.
“When so many state programs are underfunded, from the environment to education, why are we proposing to give away state tax dollars to some of the most profitable tech companies in the world?” asked McBrearty. He added that, if data centers shifted their cooling systems from evaporation to closed-loop circulation, the water burden wouldn’t even be that high. “Microsoft, Meta, Google are basically saying you have to give us money to come, and we’re not going to spend more than the bare minimum to protect water in the Great Lakes,” he said.
Under the clean-energy standard passed last year in Michigan, if energy demand exceeds existing supply, fossil fuel production that was supposed to be phased out could stay online. Christy McGillivray, political and legislative director of Sierra Club Michigan, was part of a team that offered language requiring that any data center taking subsidies use primarily renewable sources. But, she explained, DTE Energy joined Big Tech in lobbying against the change. “The CEO of DTE [Jerry Norcia] is the current president of the American Gas Association, he has a strong interest in incentivizing the buildout of gas,” she said.
The data center bill led to a huge tug-of-war, with the Democratic leadership at odds with its own caucus. Over the summer, advocates thought they had a deal for a scaled-back measure with clean-energy reforms, but Speaker Tate didn’t hold a vote. In September, Tate decided to move the use tax exemption without the clean-energy fixes; he had to rely on Republican votes to pass it, as a majority of Democrats voted no. Norcia signaled through the media that the sales tax exemption would move after the election, and it did almost immediately, with a couple of late flips meaning a bare majority of House Democrats supported it. Norcia has assured his investors that Whitmer would sign the bills.
Democrats did respond to criticism by placing a 25-year sunset on the tax credits, tying water usage to municipal systems, and putting what they claim to be ratepayer protection on the package. But the price tag could reach as high as $90 million, and advocates believe ratepayers will pay more for water and power anyway.
The same day as the data center bill, the House approved a research and development tax credit (capped at $100 million per year) and an “innovation fund” for startups. A bill rumored to get a vote soon would add $2 billion in tax credits for film and television production in Michigan. More money for Mundy Township may be requested. Refilling the Strategic Outreach and Attraction Reserve (SOAR) fund for economic development is Whitmer’s top priority.
Finally, an aggregate mining bill seeks to encourage production of raw materials like stone, gravel, and sand used in road and construction projects, by removing local regulations and substituting a weak state alternative. An attempt to pass the bill last year fizzled amid opposition from environmentalists, who said it would lead to increases in air and water pollution. But the bill is expected to come back in the lame duck, without proposed changes that would better protect aquifers. Past studies asserting a gravel shortage, the impetus for the deregulation bill, were heavily influenced by the gravel industry.
Wegela has been tallying up the corporate giveaways in increasingly angry posts on X. The proposed $250 million Renaissance Center grant to General Motors and local real estate developer Dan Gilbert has come up for particular scorn. “Dan Gilbert has $25 billion in wealth, he’s one of the most influential people in the state,” said Wegela, a self-described democratic socialist. “My assessment is he’ll get what he wants … People haven’t realized how much money is going out the door.”
Max Ortiz/Detroit News via AP
A view of Quicken Loans Technology Center’s 66,000-square-foot data center and office facility during its grand opening in June 2015, in Corktown, Detroit
OTHER BILLS AWAITING LEGISLATIVE ACTION in Michigan haven’t been put “on the board,” a term of art in Lansing for when leaders tee up a vote. “We had very limited days that met for session in the summer and fall, and we wasted entire days in a standoff on data centers,” said Rep. Dievendorf. “We’re now in a point going into the lame duck where we have hundreds of bills to protect folks who are vulnerable, or set environmental standards. And we’re being told there is not enough time.”
Bills in waiting include a housing package that includes a renter’s bill of rights, tenant right to counsel, and antidiscrimination rules. Gov. Whitmer touted the package in her State of the State Address. An effort to create a statewide program to help the 10 percent of Michiganders whose drinking water is unaffordable has languished. Legislation to restore rulemaking authority to the state Department of Environment, Great Lakes, and Energy is stuck. Restoring “polluter pay” standards, a popular measure holding landowners responsible for their own environmental cleanup, has been a Democratic priority for 30 years; it’s not on the board. A bill allowing all residents to get driver’s licenses, including undocumented immigrants, has passed with bipartisan votes before; that has not moved forward. Rep. Dievendorf has several criminal justice reform bills, including a bill expanding family visitation and another to screen law enforcement personnel for affiliations with hate groups.
Many lawmakers ran on passing these bills. But without guidance from Senate leader Brinks or Tate, a lame-duck Speaker, “it leaves everyone in the caucus fighting for oxygen for their priorities,” said Lawrence.
One bill the Democratic leadership does appear to be interested in: countering a state Supreme Court ruling that would accelerate voter-approved minimum-wage increases. A bipartisan bill limiting those wage increases could get a vote.
Criticism has built throughout the lame duck. The United Auto Workers went public, calling on the legislature to “pick a side”: fight for the working class or “do the bidding of corporations and big donors.” One Democrat, Rep. Rachel Hood of Grand Rapids, threatened to not show up for the rest of the session if progressive bills didn’t get a vote, a viable threat in a closely divided, 56-54 House. (Hood opted against running for re-election because of the “toxic” climate in Lansing.) As Rep. Coffia said, quoted on the Left of Lansing podcast, “If [Democratic leaders] have a problem with using the power that we have while we still have it to protect the most vulnerable in our state, I don’t know why the hell they’re a Democrat.”
Campaign cash looms large in the explanation for this car crash. “We have a serious problem with dark money in Michigan,” said McGillivray. “The caustic venality of how that place is run has eroded the public trust.”
For years now, dozens of Michigan lawmakers have held their own 501(c)(4) accounts as vehicles for undisclosed donations. The funds are intended for campaign spending or administrative expenses, but have been repeatedly misused for personal benefit, according to reporting from The Detroit News. Bills to update the state’s weak ethics laws and force dark-money disclosure have been introduced, but they’re in line with the other wayward legislation. One source said state lawmakers have discussed preserving the (c)(4) accounts because it’s how they take vacations.
“I think people need to start realizing that these [ethics] issues are not specific to Republicans,” said Rep. Wegela. “Democrats are corrupted by the influence of big money, by the oligarchs.”
THERE ISN’T MUCH TIME LEFT to turn things around. “When Republicans were on their way out, they passed hundreds of bills in the lame duck,” said Rep. Dievendorf, a former legislative staffer. “We have the power and we need to figure out if our lack of movement is a result of a crisis of leadership or a crisis of courage.”
Some advocates and lawmakers frame the next couple of weeks as a test for Gretchen Whitmer. Nobody in Lansing can set the agenda like the governor, and the rationale for prioritizing corporate handouts lies with her. She has also shied away from the more aggressive approach to resisting the incoming administration, declining to join a coalition of Democratic governors seeking to counter Trump and instead seeking to find “shared priorities” with the president-elect.
“People on a national stage should be having a closer look at Whitmer’s tenure,” Lawrence said. “When she has had the power in the last two years, she has constantly leaned toward corporate interests and do their bidding every time.” Lawmakers weren’t quite as damning but didn’t shield Whitmer from criticism. “I don’t feel like she learned lessons from November or took accountability,” Wegela said. Dievendorf added, “The governor can show she’s for the people by prioritizing all those needs that are not being heard.”
The legislative chaos has further depressed those who had high hopes at the start of 2023. For Lawrence, it was the first Democratic trifecta in his lifetime. “People have fought for decades to realize this,” he said. Now, “a lot of people are really pissed off. Because they feel like it’s been squandered.”
