Lawmakers want new measures of success
By Liz Nass
Gongwer News
Gov. Gretchen Whitmer and Genesee-area officials were disappointed earlier this summer when the company Sandisk pulled out of a massive computer chip proposal that was projected to create more than 9,000 jobs.
But would the project have created as many jobs as promised?
Rep. Jasper Martus, D-Flushing, has fumed about the loss of the project, saying the situation was “a personal attack on Genesee County,” which he represents, and “an utter failure” of President Donald Trump’s economic policies. The company cited “economic uncertainty” in its decision. Trump, however, was not alone in refusing to release federal CHIPS funds for the project. The administration of former President Joe Biden also ignored Whitmer’s calls to release the funds before he left office.
Martus said the Mundy Township development was going to create more jobs than all of the Strategic Outreach and Attraction Reserve Fund projects combined. The economic development projects in the state were split into two for him: Project Grit, the codename for the chip plant, and everything else.
While the large projection of the Mundy project was unique, overall lack of jobs promised is not.
Every announcement of economic development projects in Michigan makes sure to bold and highlight one figure: the number of jobs the project is projected to create.
However, with scalebacks in these projects, as highlighted by Bridge Michigan, many job creation outcomes tend to look smaller than they were first projected, either at the end of the project or in amendments after the project was announced, lessening the scope.
When this does happen, lawmakers say their labor and economic development committees jump to pointing fingers, questions of what these returns on investments look like, analysis of the process, frustration, cynicism, sometimes a lack of surprise and an overall desire for more.
“Conversations outside of committee and just in general as we’re having discussions about economic development work are that Michigan just deserves better right now,” said Rep. Kristian Grant, D-Grand Rapids. “Michiganders deserve better.”
While job numbers seem like the gold standard of how to tangibly communicate what a project will do for the community it’s being built in, some wonder if it’s a valuable way of introducing projects at all, when the jobs are hardly coming to fruition.
According to a Bridge Michigan analysis in April, only one-fifth of the jobs promised since 2019 have been created. While many of these projects are still in progress, with long processes to open and actually create these jobs, many of the endeavors with large projections were terminated.
In analyzing the 2024 fiscal year project progress records from the Strategic Fund Board and the Michigan Economic Development Corporation in the Michigan Business Development Program, out of the projects that were completed, there seems to be a tilt toward positivity with 397 jobs over projection and only 166 jobs under projection. Ten of the development projects created the number of jobs originally projected.
However, when looking at terminations since 2012, 54 projects have been axed with 47 of them let go in the last fiscal year. With these terminations, the state lost 4,159 projected jobs.
All the developments terminated in the past year were due to failure to meet or maintain job creations.
The state is still monitoring 180 projects that are projected to create 14,592 jobs. Some projects being monitored have seen all or some of their jobs come through.
The Strategic Fund Board frequently reworks contracts to scale back proposals or allow longer time periods to meet agreement requirements. They are often unanimously approved by the board. In the 2024 fiscal year, 11 changes were made to contracts either scaling back job numbers, pushing milestones back to meet those jobs or changing baseline jobs requirements.
When looking at the Mundy project, there were four different agreements signed to push back the initial start of work before the client ultimately pulled out.
With promised numbers looking different than the actual numbers coming down the line, Martus said there needs to be a “much more holistic approach” that’s less about numbers or the bottom line and more aligned with what people in those communities need from projects in their neighborhood.
He said he hears good faith conversations at local meetings questioning how money is being spent and what the impact looks like, as well as about the multiplier effect on the town, defined as the investment boost a community may experience when new employees to the area interact with local restaurants and small businesses.
But Martus would like to see more of these good faith conversations in Lansing with Republicans on what to do with development projects. He said that he had good conversations on the research and development tax credit last year and a good relationship then with House Speaker Matt Hall, R-Richland Township, who was the minority leader then. This year has become much more partisan, Martus said.
Sen. John Cherry, D-Flint, said constituents from many districts surrounding the Mundy project reached out to him with anxiety about the project happening, particularly from his many residents working in the automotive industry. Their biggest concern isn’t about new jobs coming to the area, but about whether they will keep their own positions.
He said negative effects on job numbers result in a generalized anxiety in the area from hearing about the local effects of the similar scale back of the Marshall battery project
Rep. Dylan Wegela, D-Garden City, said his constituents tend to be “appalled” by the idea of giving billions to business endeavors.
Sen. Mark Huizenga, R-Walker, said his constituents are more worried about macroeconomics: inflation and what price they see at the grocery store, so when they hear about their taxpayer dollars going towards projects that don’t happen, they feel it.
“Frankly, I don’t think that we have a good track record for the last several years, and when constituents come to me and complain about that, (I think) they’re right,” Huizenga said. “And you know, for the most part, when it comes to the big dollar giveaways for big organizations, I’ve been the no guy.”
Grant said with her constituents, it’s usually fear: What if the project doesn’t pull through?
“The truth is that burden should not be on a community,” Grant said. “There should still be an upside for a community, even if the project is scaled back or doesn’t come to fruition.”
Grant was in a work group last session where she analyzed other states and their economic development projects. When she studied an Amazon project in New York, she found that while the full scope of the project was not executed, the company still fulfilled the community investment requirements first.
The project included creating an engineering and packaging college within a nearby university that the company needed to train people for the upcoming workforce. So, Grant said, there are still people being trained for good-paying jobs even without the addition of the company’s development to the area.
Michigan could emulate this effect through site cleanup or the green space many companies like Ford added to their community investments in the Marshall project, Grant said.
Grant said her constituents want to know that even without the jobs, the community will be at the table with their best interests prioritized, especially with so much uncertainty at the finish line.
She said that most of her takeaways from the work group were not the job projections, but instead how quickly the state gets to these job numbers and decides to invest.
In Michigan, Grant said, it can take much longer. But in many other states, they decide within a month to six months if the job projections and community benefits are enough to fund it.
“There’s so many departments at the table, the MEDC, EGLE, you have the local departments depending on where the project is,” Grant said. “I think people want to get there, for sure, there’s not been a push back to not want to get there. Everyone recognizes that our timelines are an issue, but it is definitely a process and all hands-on deck to get there. I think paying attention to how some of these most recent large-scale projects have gone, there may be more willingness to come to the table and reevaluate.”
She said her constituents do care about the specific job projection numbers, and they know the value of the investment coming into their community compared to the money spent. Still, she said, they also deserve more than jobs, so the project needs to account for higher cost of housing or other benefits that come with higher traffic to local communities.
Senate leaders have their own ideas on how to change the face of economic development.
Sen. Mallory McMorrow, D-Royal Oak, has been developing a plan to overhaul how the state approaches development since 2023, and many of the key themes point to growth metrics being aligned with business decision-making overall, not just job creation.
The plan also takes from what Grant has heard from constituents where economic development success must include housing, transportation, education and overall quality of life, not just business growth.
An economic report from McMorrow said local leaders feel focusing on job creation is “problematic” because it’s not supported by a stagnant workforce and that incentivizing job creation alone “would lead to unsustainable approaches to economic growth” when businesses are focused on the idea of productivity with fewer employees over everything else.
The report said the MEDC is primarily centered on this strategy, “falling into this ineffective trap.”
“’Jobs created’ is an outdated metric, especially given Michigan has more job openings than people to fill them and many of these jobs either don’t pan out or pay low wages or don’t have good benefits.
That’s why our reform has focused on metrics like median income, increasing population, access to housing, transportation etc.,” McMorrow said in a statement to Gongwer News Service.
Michelle Grinnell, chief communications and attraction officer at MEDC, said that while job creation is “absolutely a metric” in these business development grants, it is not the only consideration in these projects, also focusing on capital investment, wages, ability to anchor companies in the state long term and other factors for a “holistic approach to development.”
Sen. Thomas Albert, R-Lowell, who generally opposes large-scale economic development projects, the MSF and the MEDC, said the role of government is not to create jobs. He recently created legislation that would get rid of the SOAR fund and says he is in the early stages of creating more than 50 bills that would effectively dismantle the MEDC.
“The role of government is to ensure a fair playing field, to ensure we have communities, we have good schools, we have attractive places to live, where people want to work, that we don’t have an overburdensome regulatory environment,” he said. “We need regulations, but to a fair degree, that takes a level of prudence to understand where that point is. But the role of government is not to go out, take people’s money, take taxpayer dollars from them and then go pick winners and losers. That’s just not the way we do it in the United States of America.”
Another question surrounding development is where the projects get these job numbers.
In the House Oversight Corporate Subsidies and State Investment Subcommittee, Wegela has questioned the REMI report in the process of job projections, an economic modeling tool where the state gets the data used in its reports.
Peter Evangelakis, senior vice president of economics and consulting at REMI, said the tool does not come up with the job numbers themselves that end up in the headlines on these projects, but instead just the business forecast and indirect jobs created by the investment.
The original projected jobs come from the companies themselves.
However, he said when consulting clients on how to market these projects, the state economic development leaders are still leading with job metrics as “the pinnacle.”
On the other hand, Evangelakis said, a change in GDP can also be a good way for states to depict the benefits of the project without the job numbers that come from their model.
He said while it’s a bit more abstract, people generally understand the size of their economy and what a positive outcome looks like, especially when it’s also tied to the change in personal income, which is also projected through the model.
Usually when jobs fall through, Evangelakis said, the economic impacts will also see a negative downturn, but it is not always completely linear with a downturn with some investment dynamics like population impacts still staying positive in the face of scale backs.
With distrust for bigger projects and its projections, Rep. Nancy Jenkins-Arno, R-Clayton, said she is more likely to support local companies that have been in the state for a while to invest in, feeling like many times these big projects from out-of-state are a “flash in the pan.”
“If we go out of the state and try to recruit a company in, and they’ll say, ‘Oh yeah, we’ll come and we’ll bring all these jobs.’ But then at the last minute, they pull back and maybe even having some of this money already invested, that’s not a good thing,” Jenkins-Arno said. “So, I think it’s better to invest in companies that actually have proven track record.”
Huizenga said he would also be more likely to vote for projects that were on a smaller scale because he feels he just trusts them more, going for a slower and steady business deal that would result in more stability in the workforce.
Jenkins-Arno said the Legislature should be wary of job projections when deciding to vote on a project, since they may not come to fruition.
When it comes to if the Legislature can do anything about these job scale backs, Grant said the Legislature needs to lead first with having an attractive community for businesses to develop in with adequate housing and education space.
“We like to lay a lot of blame at people’s feet, but the data shows that we are lagging behind in a lot of ways in Michigan, and we have quite a bit of work to do,” Grant said.
Cherry said it’s less about what the Legislature can do to push back against developments decreasing their job projections, but more about making sure to police it at the back end to assure businesses do not change their minds, losing taxpayer dollars.
On whether the state should rely on job projection numbers to judge the impact of economic development, Albert said it’s hard to say due to contracts changing over time and job numbers not capturing that some jobs just move down the road inside the company rather than a net increase of new jobs.
He said another metric to look at is capital investment from that company into the community.
Grinnell says this investment is also one of the ways MEDC does classify a project, but also said the creation of new jobs does grow a tax base, pushes community spending and helps overall economic prosperity.
“We are committed to a wide range of metrics that reflect both the need for economic opportunity in the state and an ever-changing landscape of business, not just here in Michigan, but across the country globally,” Grinnell said.
The job numbers pull in the headlines, Huizenga said, and there are a lot of other positive stories not reliant on job numbers that show real impact, such as shifting jobs in General Motors from plants in Mexico to Southeast Michigan or tool and dye companies expanding in smaller communities across the state.
Wegela said the job projections don’t lead to overall health of the economy and are just a number to report instead of the positives that would come out of investing in road or bridges or backfilling federal cuts to Medicaid or food stamps.
Grant said publishing job numbers keeps the state transparent, but the companies “cannot continue to tell communities what is worth it for them.”
Cherry said there could be better messaging on the tax capture piece of new development to show how development could be positive, but that companies can be held better accountable when showing what jobs are meant to enter the state.
“If people aren’t meeting jobs numbers, they shouldn’t be getting support,” Cherry said.
Gongwer News
Gov. Gretchen Whitmer and Genesee-area officials were disappointed earlier this summer when the company Sandisk pulled out of a massive computer chip proposal that was projected to create more than 9,000 jobs.
But would the project have created as many jobs as promised?
Rep. Jasper Martus, D-Flushing, has fumed about the loss of the project, saying the situation was “a personal attack on Genesee County,” which he represents, and “an utter failure” of President Donald Trump’s economic policies. The company cited “economic uncertainty” in its decision. Trump, however, was not alone in refusing to release federal CHIPS funds for the project. The administration of former President Joe Biden also ignored Whitmer’s calls to release the funds before he left office.
Martus said the Mundy Township development was going to create more jobs than all of the Strategic Outreach and Attraction Reserve Fund projects combined. The economic development projects in the state were split into two for him: Project Grit, the codename for the chip plant, and everything else.
While the large projection of the Mundy project was unique, overall lack of jobs promised is not.
Every announcement of economic development projects in Michigan makes sure to bold and highlight one figure: the number of jobs the project is projected to create.
However, with scalebacks in these projects, as highlighted by Bridge Michigan, many job creation outcomes tend to look smaller than they were first projected, either at the end of the project or in amendments after the project was announced, lessening the scope.
When this does happen, lawmakers say their labor and economic development committees jump to pointing fingers, questions of what these returns on investments look like, analysis of the process, frustration, cynicism, sometimes a lack of surprise and an overall desire for more.
“Conversations outside of committee and just in general as we’re having discussions about economic development work are that Michigan just deserves better right now,” said Rep. Kristian Grant, D-Grand Rapids. “Michiganders deserve better.”
While job numbers seem like the gold standard of how to tangibly communicate what a project will do for the community it’s being built in, some wonder if it’s a valuable way of introducing projects at all, when the jobs are hardly coming to fruition.
According to a Bridge Michigan analysis in April, only one-fifth of the jobs promised since 2019 have been created. While many of these projects are still in progress, with long processes to open and actually create these jobs, many of the endeavors with large projections were terminated.
In analyzing the 2024 fiscal year project progress records from the Strategic Fund Board and the Michigan Economic Development Corporation in the Michigan Business Development Program, out of the projects that were completed, there seems to be a tilt toward positivity with 397 jobs over projection and only 166 jobs under projection. Ten of the development projects created the number of jobs originally projected.
However, when looking at terminations since 2012, 54 projects have been axed with 47 of them let go in the last fiscal year. With these terminations, the state lost 4,159 projected jobs.
All the developments terminated in the past year were due to failure to meet or maintain job creations.
The state is still monitoring 180 projects that are projected to create 14,592 jobs. Some projects being monitored have seen all or some of their jobs come through.
The Strategic Fund Board frequently reworks contracts to scale back proposals or allow longer time periods to meet agreement requirements. They are often unanimously approved by the board. In the 2024 fiscal year, 11 changes were made to contracts either scaling back job numbers, pushing milestones back to meet those jobs or changing baseline jobs requirements.
When looking at the Mundy project, there were four different agreements signed to push back the initial start of work before the client ultimately pulled out.
With promised numbers looking different than the actual numbers coming down the line, Martus said there needs to be a “much more holistic approach” that’s less about numbers or the bottom line and more aligned with what people in those communities need from projects in their neighborhood.
He said he hears good faith conversations at local meetings questioning how money is being spent and what the impact looks like, as well as about the multiplier effect on the town, defined as the investment boost a community may experience when new employees to the area interact with local restaurants and small businesses.
But Martus would like to see more of these good faith conversations in Lansing with Republicans on what to do with development projects. He said that he had good conversations on the research and development tax credit last year and a good relationship then with House Speaker Matt Hall, R-Richland Township, who was the minority leader then. This year has become much more partisan, Martus said.
Sen. John Cherry, D-Flint, said constituents from many districts surrounding the Mundy project reached out to him with anxiety about the project happening, particularly from his many residents working in the automotive industry. Their biggest concern isn’t about new jobs coming to the area, but about whether they will keep their own positions.
He said negative effects on job numbers result in a generalized anxiety in the area from hearing about the local effects of the similar scale back of the Marshall battery project
Rep. Dylan Wegela, D-Garden City, said his constituents tend to be “appalled” by the idea of giving billions to business endeavors.
Sen. Mark Huizenga, R-Walker, said his constituents are more worried about macroeconomics: inflation and what price they see at the grocery store, so when they hear about their taxpayer dollars going towards projects that don’t happen, they feel it.
“Frankly, I don’t think that we have a good track record for the last several years, and when constituents come to me and complain about that, (I think) they’re right,” Huizenga said. “And you know, for the most part, when it comes to the big dollar giveaways for big organizations, I’ve been the no guy.”
Grant said with her constituents, it’s usually fear: What if the project doesn’t pull through?
“The truth is that burden should not be on a community,” Grant said. “There should still be an upside for a community, even if the project is scaled back or doesn’t come to fruition.”
Grant was in a work group last session where she analyzed other states and their economic development projects. When she studied an Amazon project in New York, she found that while the full scope of the project was not executed, the company still fulfilled the community investment requirements first.
The project included creating an engineering and packaging college within a nearby university that the company needed to train people for the upcoming workforce. So, Grant said, there are still people being trained for good-paying jobs even without the addition of the company’s development to the area.
Michigan could emulate this effect through site cleanup or the green space many companies like Ford added to their community investments in the Marshall project, Grant said.
Grant said her constituents want to know that even without the jobs, the community will be at the table with their best interests prioritized, especially with so much uncertainty at the finish line.
She said that most of her takeaways from the work group were not the job projections, but instead how quickly the state gets to these job numbers and decides to invest.
In Michigan, Grant said, it can take much longer. But in many other states, they decide within a month to six months if the job projections and community benefits are enough to fund it.
“There’s so many departments at the table, the MEDC, EGLE, you have the local departments depending on where the project is,” Grant said. “I think people want to get there, for sure, there’s not been a push back to not want to get there. Everyone recognizes that our timelines are an issue, but it is definitely a process and all hands-on deck to get there. I think paying attention to how some of these most recent large-scale projects have gone, there may be more willingness to come to the table and reevaluate.”
She said her constituents do care about the specific job projection numbers, and they know the value of the investment coming into their community compared to the money spent. Still, she said, they also deserve more than jobs, so the project needs to account for higher cost of housing or other benefits that come with higher traffic to local communities.
Senate leaders have their own ideas on how to change the face of economic development.
Sen. Mallory McMorrow, D-Royal Oak, has been developing a plan to overhaul how the state approaches development since 2023, and many of the key themes point to growth metrics being aligned with business decision-making overall, not just job creation.
The plan also takes from what Grant has heard from constituents where economic development success must include housing, transportation, education and overall quality of life, not just business growth.
An economic report from McMorrow said local leaders feel focusing on job creation is “problematic” because it’s not supported by a stagnant workforce and that incentivizing job creation alone “would lead to unsustainable approaches to economic growth” when businesses are focused on the idea of productivity with fewer employees over everything else.
The report said the MEDC is primarily centered on this strategy, “falling into this ineffective trap.”
“’Jobs created’ is an outdated metric, especially given Michigan has more job openings than people to fill them and many of these jobs either don’t pan out or pay low wages or don’t have good benefits.
That’s why our reform has focused on metrics like median income, increasing population, access to housing, transportation etc.,” McMorrow said in a statement to Gongwer News Service.
Michelle Grinnell, chief communications and attraction officer at MEDC, said that while job creation is “absolutely a metric” in these business development grants, it is not the only consideration in these projects, also focusing on capital investment, wages, ability to anchor companies in the state long term and other factors for a “holistic approach to development.”
Sen. Thomas Albert, R-Lowell, who generally opposes large-scale economic development projects, the MSF and the MEDC, said the role of government is not to create jobs. He recently created legislation that would get rid of the SOAR fund and says he is in the early stages of creating more than 50 bills that would effectively dismantle the MEDC.
“The role of government is to ensure a fair playing field, to ensure we have communities, we have good schools, we have attractive places to live, where people want to work, that we don’t have an overburdensome regulatory environment,” he said. “We need regulations, but to a fair degree, that takes a level of prudence to understand where that point is. But the role of government is not to go out, take people’s money, take taxpayer dollars from them and then go pick winners and losers. That’s just not the way we do it in the United States of America.”
Another question surrounding development is where the projects get these job numbers.
In the House Oversight Corporate Subsidies and State Investment Subcommittee, Wegela has questioned the REMI report in the process of job projections, an economic modeling tool where the state gets the data used in its reports.
Peter Evangelakis, senior vice president of economics and consulting at REMI, said the tool does not come up with the job numbers themselves that end up in the headlines on these projects, but instead just the business forecast and indirect jobs created by the investment.
The original projected jobs come from the companies themselves.
However, he said when consulting clients on how to market these projects, the state economic development leaders are still leading with job metrics as “the pinnacle.”
On the other hand, Evangelakis said, a change in GDP can also be a good way for states to depict the benefits of the project without the job numbers that come from their model.
He said while it’s a bit more abstract, people generally understand the size of their economy and what a positive outcome looks like, especially when it’s also tied to the change in personal income, which is also projected through the model.
Usually when jobs fall through, Evangelakis said, the economic impacts will also see a negative downturn, but it is not always completely linear with a downturn with some investment dynamics like population impacts still staying positive in the face of scale backs.
With distrust for bigger projects and its projections, Rep. Nancy Jenkins-Arno, R-Clayton, said she is more likely to support local companies that have been in the state for a while to invest in, feeling like many times these big projects from out-of-state are a “flash in the pan.”
“If we go out of the state and try to recruit a company in, and they’ll say, ‘Oh yeah, we’ll come and we’ll bring all these jobs.’ But then at the last minute, they pull back and maybe even having some of this money already invested, that’s not a good thing,” Jenkins-Arno said. “So, I think it’s better to invest in companies that actually have proven track record.”
Huizenga said he would also be more likely to vote for projects that were on a smaller scale because he feels he just trusts them more, going for a slower and steady business deal that would result in more stability in the workforce.
Jenkins-Arno said the Legislature should be wary of job projections when deciding to vote on a project, since they may not come to fruition.
When it comes to if the Legislature can do anything about these job scale backs, Grant said the Legislature needs to lead first with having an attractive community for businesses to develop in with adequate housing and education space.
“We like to lay a lot of blame at people’s feet, but the data shows that we are lagging behind in a lot of ways in Michigan, and we have quite a bit of work to do,” Grant said.
Cherry said it’s less about what the Legislature can do to push back against developments decreasing their job projections, but more about making sure to police it at the back end to assure businesses do not change their minds, losing taxpayer dollars.
On whether the state should rely on job projection numbers to judge the impact of economic development, Albert said it’s hard to say due to contracts changing over time and job numbers not capturing that some jobs just move down the road inside the company rather than a net increase of new jobs.
He said another metric to look at is capital investment from that company into the community.
Grinnell says this investment is also one of the ways MEDC does classify a project, but also said the creation of new jobs does grow a tax base, pushes community spending and helps overall economic prosperity.
“We are committed to a wide range of metrics that reflect both the need for economic opportunity in the state and an ever-changing landscape of business, not just here in Michigan, but across the country globally,” Grinnell said.
The job numbers pull in the headlines, Huizenga said, and there are a lot of other positive stories not reliant on job numbers that show real impact, such as shifting jobs in General Motors from plants in Mexico to Southeast Michigan or tool and dye companies expanding in smaller communities across the state.
Wegela said the job projections don’t lead to overall health of the economy and are just a number to report instead of the positives that would come out of investing in road or bridges or backfilling federal cuts to Medicaid or food stamps.
Grant said publishing job numbers keeps the state transparent, but the companies “cannot continue to tell communities what is worth it for them.”
Cherry said there could be better messaging on the tax capture piece of new development to show how development could be positive, but that companies can be held better accountable when showing what jobs are meant to enter the state.
“If people aren’t meeting jobs numbers, they shouldn’t be getting support,” Cherry said.
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