Governor Rick Snyder has signed bills to create new business incentives in hopes of luring some very large employers to Michigan.
Snyder signed the three-bill package just hours before Foxconn, a major objective of Michigan economic development officials, announced its first U.S. plant would locate in Wisconsin. But state officials say Foxconn is not the only big company scouting for new U.S. locations.
“By now we know the realities of today’s economic environment and will do everything we can to remain the most competitive state for business and show the rest of the nation and the world that Michigan is the best place to create new jobs,” Snyder said in a press release following the bill signing. The announcement made no mention of Foxconn.
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,” said Jennifer Nelson of the Michigan Economic Development Corporation. She said the state’s not been a player for deals to attract mega-employers as Michigan’s competes 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.
“It is a selected tax preference that no one else is getting,” said James Hohman of The Mackinac Center, a free-market think tank. “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 from the state income tax.”
Nelson says no company selected for the program would benefit until they met the job and wage targets. She expects it would be a year or more before a company would qualify.