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MEDC Weathers The Budget Battle
LANSING — State funds that are earmarked to help Michigan manufacturers expand inside this state will continue flowing this fall.
That’s one result of the recent budget agreement in Lansing that sets funding for the Michigan Economic Development Corp. (MEDC) in the new fiscal year.
The good news is that lawmakers and Gov. Jennifer Granholm were able to agree on a 2004 budget that keeps the MEDC intact.
Originally, there was concern that MEDC would be cut to the bone or even eliminated in the recent negotiations to resolve the deficit in Michigan’s state government. Some lawmakers had pushed for a sizeable reduction in the agency’s budget.
But if MEDC itself survived the crisis basically intact, the bad news is that funding for the agency’s job-training grants has fallen for the 2004 fiscal year. Training budget reductions from the current level continued a trend of the last several years.
The reduced funding for the economic development job training grants, or EDJT, means the MEDC will have to give harder scrutiny to the applications it receives from manufacturers looking to upgrade workers’ skills, or — as they expand — to have the state help finance the training of new workers.
“We’re doing our best to target those grants to business expansion and growth and we’ll do our best to maximize those dollars,” said Cindy Douglas, vice president of administration for the MEDC.
“We’ll just have to take a hard look at the applications that do come in.”
After peaking at about $30 million a decade ago, funding for EDJT grants to employers has steadily declined. The situation has worsened as Lansing’s fiscal straits have worsened.
The MEDC started the 2003 fiscal year with $13.5 million in EDJT funds available.
That was trimmed during the year to $12.3 million, which the MEDC awarded by mid-December of last year to 182 companies across the state.
For the state’s 2004 fiscal year that starts Oct. 1, the MEDC has $10 million available to provide as grants to companies that are expanding their staffing levels.
EDJT grants represent one of the state’s main economic development tools used to support growing businesses, Douglas said.
“You can build a building and put equipment in, but you need to make sure the people skills stay up to date,” Douglas said.
Other key funding areas in the MEDC’s 2004 budget include $25 million toward continuing development of the state’s Life Science Corridor.
The MEDC also disburses some $50 million annually in federal funds to help pay for public infrastructure improvements on behalf of companies expanding their current facilities or building a new plant, as well as for economic and industrial development planning.
The MEDC last year, for instance, awarded $30,000 to Muskegon County for the West Michigan Regional Planning District.
The money will finance a study of the supply of and demand for industrial property within a five-county regional planning district and determine the current inventory of available industrial park space.
The study will also help identify future property needs to ensure that there is sufficient industrial space for economic growth in the region that includes Muskegon, Lake, Mason, Newaygo and Oceana counties.
The MEDC also uses tax credits to entice corporations to build or expand in the state.
In West Michigan, tax credits have been used in the past year to help accommodate major expansion plans for:
- Royal Plastics, in Ottawa County’s James Township
- Smiths Industries, in Cascade Township
- A new Gentex Corp. plant, in Zeeland
- Herman Miller’s relocation of up to 380 jobs from Georgia to its Spring Lake campus.