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.