Local economic development authorities repeatedly benefit from state taxpayers

Local governments working with economic development authorities repeatedly take money from state taxpayers for the expressed purpose of encouraging economic growth and revitalization.

One of the ways in which the entities receive funding is through legislators’ requests to include money in the state budget.

House Speaker Matt Hall, R-Richland Township, requires legislators to fill out a form detailing the nature of those requests. One question on the form asks whether the entity slated to receive state funds has received public funding in the past.

The Village of Port Austin Downtown Development Authority requested, through Rep. Gregory Alexander, R-Carsonville, $500,000 from taxpayers for a pavilion.

The request notes that the Michigan Economic Development Corporation has already awarded $2.5 million for the project, which will cost $4.7 million.

The MEDC’s contribution still comes from the same pot of money – the taxpayers.

The Economic Development Department of the city of Westland could be awarded $1 million through a legislative spending request submitted by Rep. Peter Herzberg, D-Westland.

The representative, when asked on the request form if the entity has previously received public funding, stated, “not applicable.”

But according to CBS News in 2023, Westland received a $695,000 brownfield grant from the Department of Environment, Great Lakes, and Energy.

Manistee received $756,825 from state taxpayers in May 2025 for River Street enhancements. The city’s downtown development authority could receive an additional $1.5 million in the 2027 budget for the same project.

Manistee, according to the request form, has received $1.67 million from the federal government, $1.05 million from the state and $1.14 million from local taxpayers.

The grant, requested by Rep. Curtis Vander Wall, R-Ludington, states the purpose is to “support phased streetscape and public infrastructure improvements along the River Street corridor in downtown Manistee.”

The city was also awarded a $150,000 grant in 2023 from the Michigan Economic Development Corporation for its revitalization efforts.

Although the pots of money appear to be awarded through either the state budget or the MEDC, ultimately, it comes from the state taxpayers.

Downtown development authorities were created in state law in 1975.

The Downtown Development Authority Act is meant to encourage economic growth in local communities.

State money was not originally permitted, according to the original act. The money would come from additional local tax revenue — for example, increased property tax collection.

When the Michigan Economic Development Corporation was created in 1999, lawmakers amended the act.

The state began issuing grants to local governments and development authorities.