(The Center Square) – Three bipartisan bills passed by the Michigan House would create the Michigan Innovation Fund, which would use taxpayer dollars to provide grants to certain venture capital funds and nonprofits to promote business startup investment.
The fund would support various tax credits and incentive programs for early-stage research and development businesses, data centers, and qualified nonprofit programs like qualified higher educational institutions. All grant agreements would have to ensure at least 15% of the grant money invested is allocated to “geographically disadvantaged” businesses.
“This legislation is about securing Michigan’s economic future. We’re creating a cycle of opportunity that will generate good jobs and elevate our communities, by investing in our entrepreneurs and building a stronger foundation for local businesses—and that includes uplifting businesses owned by marginalized groups, including people of color,” said state Rep. Jason Hoskins, D-Southfield, who sponsored HB 5652.
Supporters argue the bills would remedy the lack of start-ups in Michigan by providing funding to already established organizations specializing in venture capital investing, which would theoretically stimulate broader economic development by attracting national investors to participate.
“The Michigan Innovation Fund will be a key component to the state’s economic ecosystem by supporting entrepreneurs to create the next great Michigan business,” state Rep. Greg VanWoerkom, Republican vice chair of the House Appropriations Subcommittee on Labor and Economic Opportunity, said.
Not everyone supports the legislation. The Michigan League of Conservation Voters opposes some of the bills due to environmental concerns, specifically regarding the construction and operation of data centers.
“Economic development and what makes Michigan great – our water, land and clean air – should go hand-in-hand, but the legislation voted out today falls far short of ensuring our rates won’t go up and we won’t see the rush to build additional fossil fuel plants to power these data centers,” MLCV deputy director Bob Allison said.
State Rep. Donni Steele, R-Orion Township, voted against the bills for economic reasons, arguing taxpayers should be receiving tax breaks, not large corporations.
“We saw corporate welfare galore pass the House this week. Republicans and Democrats joined together to dole out taxpayer dollars to everyone other than the people who earned them,” Steele said Thursday. “Our infrastructure is crumbling, and school safety is still drastically underfunded, yet we spent session this week courting big businesses who don’t deserve our tax dollars in the first place.”
