Michigan Governor’s proposed FY 2025 spending plan includes $60M for Innovation Fund

Last week, Michigan Governor Gretchen Whitmer presented her Fiscal Year 2025 Executive Budget recommendations to a joint session of the House and Senate Appropriations committees. As part of the $80.7 billion proposal, Whitmer outlined a number of priorities that seek to enhance Michigan’s economic competitiveness, and builds upon the “Make It in Michigan” strategy—her plan for investing in the state’s people, places and projects. The strategy focuses on cultivating good-paying jobs, a skilled, talented workforce, and making Michigan an affordable, equitable, and vibrant place to live. Among the proposed budget items is a new $60 million Innovation Fund.

Overall, the governor’s recommendations are focused on lowering the costs for Michiganders, providing high-quality education, and boosting the state’s economic growth through targeted investments to economic and workforce development initiatives. These initiatives include  growing the state’s cost-free preschool program as an affordable and accessible option for working parents and expanding educational affordability and opportunities with tuition-free community college programs as part of what the governor has touted as the “Michigan Guarantee.”

As part of the governor’s recommendations and legislative agenda, Whitmer is calling for:

• $60 million to establish an Innovation Fund that would assist high-growth scalable startups and the innovation and entrepreneurship eco-system. The fund would also provide universities and nonprofits funding to invest in tech startups, with all returns on investment being reinvested back into the program to support additional startups in the future. The efforts will diversify the state’s economy, as well as attract entrepreneurs to the state;
• $100 million for a Research and Development (R&D) Tax Credit (would apply to tax years beginning on or after January 1, 2024) to spur innovation and attract more knowledge-based jobs to Michigan;
• $25 million for the Make It in Michigan Competitiveness Fund to augment green economy initiatives and leverage available federal funding opportunities focused on energy, technology, and climate, such as the Bipartisan Infrastructure Law (BIL), the CHIPS and Science Act (CHIPS), and the Inflation Reduction Act (IRA);
• a $30 million increase in funding for the expansion of the Michigan Achievement Scholarship, which, if approved, would ensure that every Michigan high school graduate has access to a tuition-free associate degree or skilled certificate at a community college, and which furthers the Michigan Reconnect program, which provides tuition-free education for adult learners aged 25 and up;
• a $20 million increase in one-time funding to the state’s existing Going PRO Talent Fund, which makes awards to employers to assist in training, developing, and retaining current and newly hired employees. The recommended investment would represent a 36% increase in capacity to the program, which has been proven as a successful workforce development tool;
• $20 million for Talent Solutions to address current and future workforce needs. These funds will be used strategically to provide specialized economic assistance to businesses that are locating or expanding in Michigan, as well as to develop customized solutions to fill identified talent gaps in key industries;
• $500 million to be deposited into the Strategic Outreach & Attraction Reserve Fund (SOAR) to attract new manufacturers and industries to the state. While the fund has a current balance of over $1 billion, and the governor did not offer much detail about the use of the proposed additional funding, it would be directed towards complementing the administration’s other recommended investments to support revitalization and placemaking, rural prosperity grants, additional business attraction, and community revitalization such as:
  • $50 million for the Revitalization and Placemaking Program,
  • $20 million for Business Attraction and Community Revitalization to stimulate job creation and private investment, revitalize and redevelop vital properties, and support small businesses,
  • $100 million of ongoing funding to create jobs and develop high-quality places that attract residents and spur economic growth,
  • $2.5 million for Rural Prosperity Grants that help enhance regional and statewide coordination of services and programming in rural communities and help develop the plans and partnerships needed for economic growthand,
• $20 million investment in the Department of Labor and Economic Opportunity (LEO) for specialized economic assistance to businesses locating to or expanding in Michigan.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. (The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.