Michigan Gov Plans to Boost Entrepreneurship, Unveils FY11 Budget

February 24, 2010

A plan to provide loans and specialized training to foster entrepreneurship recently was announced by Gov. Jennifer Granholm. The two-pronged, $43 million strategy consists of a loan partnership between credit unions and Michigan Small Business and Technology Development Centers with specialized training provided through the Michigan Economic Development Corporation's FastTrac NewVenture Program.

The loan partnership is expected to make about $43 million available to help more than 2,000 small businesses with new or expanding operations. For the training component of the plan, the Michigan Economic Development Corporation has pledged $200,000 to expand the 10-week FastTrac NewVenture program, designed for entrepreneurs in the early stages of business development, reports the Associated Press.

Earlier this month, Gov. Granholm unveiled the FY11 executive budget, which maintains level funding of $75 million for the state's 21st Century Jobs Fund, increases federal funding for the No Worker Left Behind Initiative, and restores the Michigan Promise Scholarship program for higher education as a tax credit. The $47.1 billion budget includes $7.9 billion in general fund spending, and recognizes more than $20 billion in federal revenues, according to the governor's office.

The Michigan Strategic Fund is slated to receive $169 million in FY11, which includes $75 million for the 21st Century Jobs Fund (the same as the FY10 estimate). The fund supports job creation in emerging fields such as renewable energy, life sciences, homeland security, and advanced manufacturing by investing in basic research at universities and providing access to capital.

Within the Department of Energy, Labor and Economic Growth, the governor recommends $648 million in all funds, an increase of $35 million, to provide education and training to upgrade workers' skills in healthcare, advanced manufacturing, and alternative energy fields, including the No Worker Left Behind Initiative. The initiative, which was supported by both general and federal funds in previous years, would receive no general fund support in the upcoming year.

To restore funding for the Michigan Promise Scholarship grants — eliminated in the current year budget — the governor recommends restructuring the program as an income tax credit. Under the plan, the Michigan Promise program would be converted to a new refundable $4,000 tax credit available to students who graduate from Michigan colleges and continue to work in the state for one year. Funding for the Agriculture Experiment Station and Cooperative Extension Service is maintained at current funding levels: $34.2 million and $29.5 million, respectively.

While the state currently operates on an annual budget, Gov. Granholm proposed reforms to institute a two-year budget for the state beginning in FY12 and requiring a June 30 deadline for completion of all legislative action on the budget. The state's current fiscal year ends Sept. 30. The proposed reforms also would require the passage of all legislation needed to implement the budget by the June 30 deadline and would require a two-year sunset for all tax expenditure credits.

The FY11 executive budget documents and bills are available at: http://www.michigan.gov/budget.

Michiganentrepreneurship, state budget