Dem-controlled Michigan Legislature approves $1B spending plan

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The Michigan Legislature will set aside $200 million out of about $1 billion in spending for a paper mill in the Upper Peninsula, while also setting aside more money for the state’s economic development fund.

The legislation, which was passed late Thursday night by the new Democratic-controlled Legislature, includes a $946 million spending plan and an additional $146 million to close out last year’s budget, bringing the total spending to nearly $1.1 billion.

Nearly $200 million in grant funding will be set aside for upgrades at the Escanaba Mill, located in the Upper Peninsula and operated by Swedish paper producer Billerud. The company is looking to begin making a more technologically advanced paper product that will be used as packaging for pharmaceuticals and healthcare, cosmetics and drinks.

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The funding for the Escanaba Mill comes after the Michigan Strategic Fund approved a 15-year tax break last month to support Billerud’s planned project at the paper mill, which is expected to bring in nearly $1 billion in investments from the Swedish company and retain at least 1,240 jobs in the region.

The passage of the supplemental budget Thursday came one day after Democratic Gov. Gretchen Whitmer delivered a State of the State speech that focused heavily on economic development and keeping jobs in the state.

Rep. Jenn Hill of Marquette called the paper mill project a “generational investment” and said that after the Lower Peninsula received multiple economic development projects last year, it was time for the Upper Peninsula “to have a turn.”

“The governor talked last night about providing young people with a reason to stay in Michigan. A big part of that is economic opportunity,” said Hill. “Let’s invest in the Upper Peninsula and the future of green manufacturing in our state.”

The bill also gives an additional $150 million for Michigan’s Strategic Outreach and Attraction Reserve, which brings the total remaining balance of the fund to $890 million.

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Republicans criticized the late-night spending bill as being rushed and secretive. Rep. Mike Harris of Clarkston said that Democrats planned the bill “behind closed doors” and “waited until the last minute to make this public.”

“Democrats are starting their new majority by shoving an enormous, secret spending bill down the throats of the people of Michigan,” House Republican Leader Matt Hall said in a statement. “They gave the public and their elected representatives virtually no time to read the ridiculously over-stuffed plan before the vote.”

During December’s lame duck session, talks between Whitmer and the Republican-led Legislature stalled before any supplemental budget could be passed. Democrats took full control of both chambers this year and a budget surplus that was projected to grow to over $9 billion by fall.

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The Democratic-led Legislature also worked Thursday to pass tax relief that includes increasing the state’s Earned Income Tax Credit to a 30% match of the federal credit, compared with 6% currently, and a retirement tax repeal. Final passage of both bills is expected sometime next week.