Governor Rick Snyder has signed bills to create new business incentives in hopes of getting a few very large employers to locate in Michigan. The new incentives are controversial.
The new law would benefit a handful of companies that create hundreds or thousands of average or above-average wage jobs. The deal would allow the companies to keep some or all of the state income taxes collected from their employees.
“Michigan has not had a competitive tool to attract and compete for those larger projects," says Jennifer Nelson of the Michigan Economic Development Corporation. She says the state’s not been a player for deals to attract mega-employers to the state. She says Michigan’s competing with manufacturing states like Wisconsin and South Carolina.
But critics, Republicans and Democrats, say it’s a tax giveaway that’s not fair to other businesses. James Hohman is with the free-market Mackinac Center for Public Policy. He says the new law is a payoff for a small number of businesses.
“It is a selected tax preference that no one else is getting. If everyone got these types of deals, which they can’t because they are limited, the state would be bankrupt, or at least it wouldn’t have the 10 billion dollars from the state income tax," he says.