LANSING - A "21st Century Jobs Fund" was created Nov. 21 when Gov. Jennifer Granholm signed bills that will invest more than $2 billion in diversifying Michigan's economy and increasing employment.

Under the plan, which also received prior approval from the Michigan House and Senate, the state will invest nearly $1.5 billion - an investment that spends a lot of tobacco settlement money that Granholm expects will leverage an additional $1 billion dollars or more. State lawmakers hope the money will spur private investment focused in four key growth areas: life sciences, advanced manufacturing, alternative energy, and homeland security.

"Today is a turning point for Michigan's future," said Granholm, who has pushed this economic package throughout 2005 as the centerpiece plan of turning around the state's flagging economic fortunes. "By investing billions in diversifying our economy, we will create thousands of new, good-paying jobs that won't be outsourced and that will encourage our children to build their futures in Michigan."

The construction industry is expected to be an eventual beneficiary of the allocation, building on existing investments and infrastructure. Earlier this decade, the University of Michigan spent $90 million on construction of its Life Sciences Institute, and the Seaborg Center at Northern Michigan University was also completed at a cost of $46 million.

The building trades in Michigan could further benefit from potential homeland security upgrades associated with its several international border crossings. The building trades are also ready to do the work when it comes to manufacturing expansion.

The plan also includes:

• Up to $450 million through the Venture Capital Investment fund to help start-up companies succeed;
• New tax incentives to encourage investors to make and keep their investment dollars in Michigan;
• Revamped rules which will lower fees and produce less red tape for new businesses in Michigan;
• New incentives to encourage life sciences companies to use Michigan suppliers and services.

At the same time she passed the jobs package, Granholm also signed targeted tax cuts that would help existing manufacturers keep jobs and facilities in Michigan, encourage consolidation of their out-of-state operations here, and help small businesses by reducing their tax rate and cutting red tape.

However, Granholm also vetoed two tax bills that she said created new tax loopholes for business. Because the vetoed bills were tie-barred to the tax cut bills, the tax cuts were effectively scuttled. State Republicans leaders howled in protest, but then offered a compromise deal on Nov. 29. Senate Majority Leader Ken Sikkema and House Speaker Craig DeRoche announced legislation that will provide half a billion dollars in tax relief for Michigan's "core businesses" - especially the struggling manufacturing sector.

"We must grab every opportunity to show businesses that we mean business," Sikkema said, "that we are serious about wanting to be their partners in success."

The latest package of bills would reduce taxes for Michigan's large manufacturers by more than $500 million over four years beginning Jan. 1, 2006.

A Lansing State Journal editorial said Granholm "was right to veto the legislation," because the loss in Single Business Tax revenues would amount to some $4.7 billion by 2011. "Not sound policy," the Journal said. 

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MDOT's road funding budget concentrates on 'preserve first'

The Michigan Department of Transportation on Nov. 16 released its revised version of a five-year plan for constructing and repairing state highways and bridges.

MDOT's "Preserve First" philosophy predominates in the plan, which covers 2006-2010. The five-year program represents an $8.91 billion investment in MDOT's transportation system, with $6.7 billion of those funds earmarked for repairs and maintenance of roads and bridges, rather than new construction. Passage of the federal transportation bill this fall bumped up Michigan's share of road money from earlier estimates by about 5 percent.

The day after that announcement, Gov. Jennifer Granholm announced that the state would "accelerate" $618 million in state road spending, covering 158 highway projects in 2006-2007, as part of her "Jobs Today" initiative.

"The Jobs Today Initiative and the investments we are announcing today will help put more Michigan workers back on the job," said Granholm. "Local communities will benefit from transportation system improvements, and our state will benefit from the significant economic impact of the more than 11,000 jobs supported by these projects."

MDOT said the five-year plan ensures that the state will "substantially
achieve" the State Transportation Commission's 1997 system preservation goal of 90% of state roads and bridges in good condition by 2008. The commission is expected to

An annual average of $1.36 billion per year will be invested in the highway
program over the 2006-2010 timeframe, which is about what the state spent in the year 2004. While that amount is down from annual state highway spending at the start of this decade, road spending in Michigan is way up from a decade ago. In the three-year period of 1994-1997, Michigan spent a total of $1.7 billion on road work, when public uproar over potholes pushed road spending higher.