Records: Rural Michigan ‘overlooked’ in Michigan’s $6B subsidy spending spree

Michigan spent $6 billion on business growth plans since 2022, with less than 1% going to northeast Michigan
The disparity gap was $71 per person in the northeast compared to $854 in west Michigan
The gaps may fuel to disagreement over the state’s economic development strategy

Tom Wdowik is relieved these days by waves of vacationers visiting cabins, restaurants and hotels along Lake Huron, despite worries that high gas and food prices this year could stall tourism.

The region relies heavily on travel, and Wdowik wonders if he’d have less anxiety if the state spent more to diversify the economy on the sunrise side of Michigan.

“We’re often the overlooked corner of the state,” said Wdowik, who owns Sandcastle Beach Resort in Oscoda.

Indeed, Michigan has spent $6 billion since 2022 on business support and attraction through its Michigan Economic Development Corp. — and a Bridge Michigan analysis found a wide disparity in spending.

Michigan map showing 10 numbered economic development regions, with counties grouped and color-coded across the Upper and Lower Peninsulas. — All 83 counties in Michigan are divided into 10 economic development districts. (Courtesy of MEDC)

In the northeast Lower Peninsula from Grayling and Oscoda to Cheboyan and Alpena, the state spent $71 per resident during that time on programs from business subsidy grants and small business support to increasing entrepreneurship and capital access.

The west Michigan region anchored by Grand Rapids received $854 per resident.

The median across all 10 Michigan regions is $525.

All told, 49 of 83 Michigan counties — including many that are losing population and posting lower incomes in the struggling state — receive less business development funding than their share of the population.

“Some people take the viewpoint that in some of these distressed areas, there’s nothing you can do to help them,” said Tim Bartik, an economist and economic development subsidy expert at the Upjohn Center for Employment Research in Kalamazoo.

“I don’t think that’s inevitable.”

Economic development needs to ensure that “residents of Michigan are better off,” Bartik said.

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The MEDC tracks spending by region, spokesperson Danielle Emerson told Bridge. However, it has no specific budget allocated by community, and its programs largely respond to local requests.

“MEDC’s role is to be a partner, not a driver, of the market,” she said.

Bridge’s findings underscore a longstanding debate in economic development: Should government investments reflect geographical fairness or go where they can do the most good?

For years, many in Michigan have advocated concentrating spending in its biggest cities, but growing research from the Brookings Institution and others highlights the need for more investment in struggling communities.

Whatever the case, the geographic disparity comes amid debate about the effectiveness of Michigan’s business growth policies. Under Gov. Gretchen Whitmer, data shows business incentives led to lower-than-promised job creation and high numbers of low-paying jobs.

Lawmakers have noticed: Her signature large-scale subsidy fund, SOAR, was defunded last fall. The MEDC’s business subsidy budget also was cut, going from $100 million to $59 million, amid some lawmaker calls to disband the public-private partnership. Further, the legislature initiated no new subsidies in 2025.

Finding the disparity

Bridge analyzed MEDC spending awards since 2022 made to communities in the MEDC’s 10-regions of the state.

The money came from the key state-funded programs to increase jobs, small business support, community development as reported on the MEDC’s online project map as well as $2.4 billion in subsidies and site preparation funding for Whitmer’s signature economic development plan, the Strategic Outreach and Attraction Reserve.

Records show regional disparities affected most of the state’s land area:

The northeast Lower Peninsula received $14 million since 2022, about 0.24% of the funds, despite having 2% of the state’s residents.
The Traverse City region, which has 3% of the population, received less than 1% of funding.
The six-county region around Ann Arbor, home to 10% of the population, received 4% of money, $219 per person.
The Flint area, home to 8% of residents, received 6% of funds — a share inflated by a single, $261 million project that doubled the region’s total funding.
Metro Detroit, which has 39% of the state population, received 41% of the spending.
Grand Rapids’ 13-county region, with 17% of the population, received nearly 25% of awards.

The state says it does not treat its regions the same because it coordinates investment with public and private partners, spokesperson Emerson told Bridge.

“Every community and region is at a different stage of growth and barriers to overcome,” Emerson said.

And while it seeks “regional impact” across the state, it does not use geography to set its budgets for such as the Michigan Business Development Program and Michigan Community Revitalization Program.

“We work closely with local partners to grow our pipeline of project applications from the region,” Emerson said. “And our ability to identify and support good deals for the state depends on that pipeline.“

Solutions for ‘serious trouble’

The discussion on how Michigan spends economic development money comes as policymakers urge a reckoning of the state’s declining prosperity.

The state is ranked 49th in population growth; 40th in per capita incomes — a drop from 18th just 25 years earlier; 50th for GDP growth.

The situation was bleak enough that a theme of the recent Mackinac Policy Conference was “The House is on Fire,”

“We’re in serious trouble,” said co-chair Bob Riney, CEO of Henry Ford Health System.

Michigan needs to maximize its business growth funding, Bartik said.

It makes sense to target areas with lower rates of employed people ages 25-54, Bartik added, “which in Michigan would be many of the rural areas, and would also include places like Flint.”

Lou Glazer, president of Michigan Future Inc., questions whether any MEDC business growth spending can lift the state.

“There’s very little evidence that those (MEDC-funded) projects add up to improving people’s economic outcomes,” Glazer said. “The conversation needs to be what should we be spending money on that really drives increases.”

Michigan will elect a new governor in November who could retool Michigan’s economic development plan.

State economic advocates call for some specific steps to pair the spending with increased prosperity.

Michigan needs “a talent-based economic strategy, not an enterprise-based economic strategy,” Glazer said.

Bartik and Glazer also advocate for that targeting specific business development funding to less populous regions, instead of the MEDC’s existing strategy.

“There’s no silver bullet” for the rural areas of the state while all of Michigan grapples with concerns about prosperity, Eric Lupher, president of the nonpartisan Citizens Research Council.

But improvement will come from “recognizing that having those vibrant cities of all sizes” are a foundation for the state’s future.

Lupher said he’s looking for an overall strategy that emphasizes both innovation and helping existing businesses thrive.

Lawmakers need to ask if Michigan has an active plan for that, Lupher said, or whether the low spending across much of the state signals “economic fishing by putting the hook out and seeing who bites.”

The Northeast still hopes for more

In Oscoda, Wdowik is excited to see some new businesses open in the community of about 8,000, like a boutique and an indoor golf facility.

Wdowik, a leader of the Oscoda Area Convention and Visitor Bureau. calls the disparity in state business funding “not good,” even as he understands larger areas can attract larger businesses.

“But by the same token, you can’t let the rural areas just stand alone,” he said.

The MEDC’s Region 3 covers 11 counties, roughly along I-75 to West Branch up to the Mackinac Bridge and east to the Lake Huron shore. Communities like Oscoda, Alpena, Cheboygan, Gaylord and Grayling are among the largest, spread across hundreds of miles.

The area has the state’s lowest median wage, $20.20, more than $2 per hour less than the average.

Statistically, nine of the counties have the oldest residents in the state — and the region is tied with the Thumb in having the lowest percentage of residents with bachelor’s degrees.

Getting fewer resources to grow and support businesses means everyone has to struggle more, said Jennifer Riggs, executive director of county economic development group Develop Iosco.

“How do you spread that across 11 counties and get the same outcome?” Riggs asked. “You can’t. It’s impossible to make the same impact.”

Jennifer Riggs, executive director of county economic development group Develop Iosco, said disparate state resources means residents have to “struggle more.” (Courtesy image)

To be sure, MEDC funding is generating some wins. In Grayling, for example, Saab committed to a munitions factory, with $5.6 million in MEDC support. The new, five-story Sawmill Lofts apartment building added retail space downtown, too. It received $1.3 million from the state.

In Oscoda, the Oscoda-Wurtsmith Airport offers growth potential; it’s already the largest employer in the northeast with 3,000 workers. The facility received a $500,000 SOAR grant in 2024 to repair former Air Force taxiways and add capacity.

But the expanse of the area and the seasonal business nature of many businesses makes the work that much harder, Riggs emphasized.

And it means even the smallest changes matter.

“Every time you add a new employer, you have new jobs, you’re giving choice to your residents on where they work,” Riggs said.

Landing just two dozen new jobs would “trickle down” across the community as workers buy gas and groceries, and become a customer base for year-round businesses, she said.

That many jobs may make one or two new daycares possible. New houses could come next. And they’d keep people shopping in the small businesses that remain rooted in Michigan’s smallest cities.

Michigan as a state needs to pursue success and shape a solid economic development plan, Riggs said.

While doing that, she added, “we need to put a focus on making sure that our Huron Coast is getting the same resources.”

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