Michigan Defunds Billion-Dollar SOAR Program After First Year of Jobs Undercuts Promises

State Eliminates Economic Development Subsidies Despite Mixed Results

GRAND RAPIDS — Michigan lawmakers have defunded the state's flagship economic development program for the 2026 budget year, eliminating taxpayer subsidies that have failed to deliver on job creation promises while spending billions in taxpayer money.

The Strategic Outreach and Attraction Reserve, known as SOAR, was designed to lure major corporations to Michigan with massive cash incentives. Since launching in 2022, the program has awarded companies over $1.86 billion in subsidies, but the results have fallen far short of projections.

"Large checks are not necessarily going to fix everything," said Rep. Jasper Martus, D-Flushing, who has been one of the loudest critics of the program's effectiveness.

One Year of Hiring Misses Target by 12,000 Jobs

Last year alone, SOAR recipients created 1,846 jobs, representing less than 13 percent of the 14,559 new positions promised over several years under SOAR agreements with the Michigan Economic Development Corp.

The state has so far created only 6,874 new or retained jobs from the entire program, despite spending $1 billion of the allocated funds.

This includes:

• Dow Inc. retained 5,028 jobs in Midland in exchange for a $120 million grant to modernize facilities
• Solar Technology LLC added 1,244 jobs in Saginaw County, exceeding its promise of 1,151 positions
• Ford Motor Co. hired 146 workers at its BlueOval Michigan factory in Marshall

"These are good-paying jobs with important economic impacts to the communities they are in," said MEDC spokesperson Danielle Emerson, defending the program.

But the reality is stark: companies promised to create or retain a combined 19,599 jobs in exchange for subsidies. The actual hiring is less than one-tenth of that target.

Cost Per Job Skyrockets to Nearly $800,000

The financial efficiency of SOAR has come under intense scrutiny. Based on still-active job-creation incentive awards and recent company reports, the cost per new job has reached approximately $795,000.

The program was originally projected to spur $18.7 billion in corporate investments in Michigan. After companies changed plans, that figure dropped to $10.7 billion.

If all promised jobs are realized from active projects, the cost per job would drop to about $160,000 — still an exorbitant price tag for a single position.

"About $651 million in SOAR funding remained available to the state from $2.4 billion in budget authorizations," according to the House Fiscal Agency in January.

Major Projects Already Fall Short

Even the most prominent SOAR recipients have struggled to meet their commitments:

Ford Motor Co.

The automaker did not pursue its first SOAR award meant to support electrification upgrades. Ford also put its $3.5 billion battery factory in Marshall on hold before downsizing to a $2.5 billion investment expected to create 1,700 jobs.

The company's SOAR awards were reduced by about $70 million to $326.3 million. Last year's hiring counted 146 new workers at the Marshall facility, with average pay reported at $75,000 per year.

More than 70 percent of new workers come from Marshall, Albion, and Battle Creek, according to Ford.

LG Energy Solution

A 2.8-million-square-foot battery factory near Lansing is among SOAR-funded projects where hiring is expected to increase. The state transferred a $120 million cash award to LG after GM sold the battery factory to its partner.

LG shifted production from EV batteries to energy storage systems and announced a $4.3 billion contract with Tesla in March. The company has reported hiring 408 workers at the facility so far.

General Motors and LG Energy Solution

Among the program's setbacks was a $3.5 billion drop in expected spending by GM and LG Energy Solution, a blow to the program's original electric vehicle focus.

Defunding Sparks Debate Across Party Lines

The decision to defund SOAR has unified critics across the political spectrum. Republicans and some Democrats have questioned whether the billions spent are worth it.

"Dissatisfaction with Michigan high-dollar economic development subsidies has escalated since 2022 among Democrats and Republicans, culminating in lawmakers eliminating it from this year's budget," according to multiple news reports.

The controversy has intensified as the state faces a $113 million reduction in tax revenue in 2026, according to state estimates.

What Happens to Remaining Funds?

About $651 million in SOAR funding remains available from the $2.4 billion in budget authorizations. The program was designed to create jobs and retain them in Michigan, but with only 1,846 new jobs created last year, the return on investment remains questionable.

Another $660 million was awarded to economic development groups for site readiness without a specific company in mind. This includes $259 million to create a speculative megasite near Flint.

Looking Ahead

The MEDC remains confident in the program's long-term impact, though the program has been eliminated from the current budget year.

"We have every confidence it will continue to happen," said MEDC spokesperson Danielle Emerson. "These are good-paying jobs with important economic impacts to the communities they are in."

But with less than 13 percent of promised jobs realized after years of investment, West Michigan residents and state taxpayers are left questioning whether the billions spent will ever deliver on the promises made.

The state has so far spent $1 billion of the $1.86 billion awarded to companies. At this rate, it will take another 4.5 years to spend the remaining funds — and the job creation promises have already fallen dramatically short.

Sources:

• Bridge Michigan: "A first for Michigan's $2.4B SOAR business incentive program: New jobs" — https://www.wzzm13.com/article/news/local/michigan/a-first-for-michigans-24b-soar-business-incentive-program-new-jobs/616-7ff88e43-cca1-4ffa-b006-84294a5ce291
• Associated Press: "A first for Michigan's $2.4B SOAR business incentive program: New jobs" — https://apnews.com/article/michigan-business-incentives-jobs-2e9b59d3a3291503e5638a5420baca95
• Michigan Advance: "Millionaire tax proposal for Michigan schools pulled from 2026 ballot plans" — https://michiganadvance.com/briefs/millionaire-tax-proposal-for-michigan-schools-pulled-from-2026-ballot-plans/