November 04, 2005
November 4, 2005
$2 Billion-Plus Investment in 21st Century Jobs; $1 Billion in Targeted Tax Cuts for Manufacturers, Small Biz
LANSING – Governor Jennifer M. Granholm today announced an agreement with legislative leaders that will result in more than $3 billion for job creation funds and incentives, and the most significant restructuring of business taxes in three decades.
The Governor proposed similar job creation and tax restructuring initiatives in her Jobs Today, Jobs Tomorrow economic growth plan outlined in her State of the State Address last February. Today’s announcement implements key elements of that plan, including incentives to diversify and grow Michigan’s economy and tax cuts for Michigan’s manufacturers. The plan also features a major new economic development tool that will serve as an incentive for businesses to “insource” jobs into Michigan.
“This is a victory for every worker, every business, and every citizen in Michigan,” said Granholm. “The agreement has been nine months in the making, but Michigan’s economy will feel its impact for generations to come.
“In February, I laid out a comprehensive jobs plan to diversify our economy, to create tens of thousands of jobs, and to make sure all our kids can find work right here in Michigan. With this plan, we are putting the throttle down to create jobs and opportunity across the state – and we are doing it in a fiscally responsible way. This plan will not require the kind of deep cuts to critical programs like education and health care that other proposals threatened. We are going to preserve our outstanding quality of life and create a generation of new jobs at the same time.”
In her State of the State Address, the Governor proposed a $2 billion fund to create 72,000 new jobs in high-tech industries. The legislation agreed upon will implement this $2 billion investment by:
creating a $1 billion, 21st Century Jobs for Michigan Fund to spur job growth and fuel start-up companies. The state will securitize tobacco settlement dollars to immediately invest $400 million in the new fund; $600 million in non-securitized tobacco dollars will also be invested in the fund over the next ten years;
providing an additional $300 million for venture capital investment through the Venture Michigan program that will leverage as much as an additional $900 million in private investment;
making available new tax incentives for “angel investors.” Angel investors will receive a 100 percent tax deduction on any profits from their investments in Michigan businesses when they reinvest those profits into other Michigan ventures.
The Governor has also proposed significant tax relief for Michigan manufacturers and a restructuring of Michigan’s Single Business Tax that is valued at $1 billion. Legislative leaders have agreed with the Governor to:
create a job attraction incentive by providing a 100 percent personal property tax credit for investments in 2006 and 2007 that will be made available to any business that “insources” jobs and equipment into Michigan from another state or country;
give our struggling manufacturers an immediate 15 percent refundable personal property tax credit;
reduce the Single Business Tax rate by .05 percent beginning in 2009;
provide a significant rate cut for small businesses that pay the alternative tax.
Democratic leaders praised this package today.
“While this is not everything I may have hoped for, today's agreement is an important development for the future of our economic health,” said Senate Democratic Leader Bob Emerson. “Every family in Michigan is affected by the issues we're tackling, and that's why a jobs stimulus package has been priority number one for the Governor and legislative Democrats.”
“As leaders, our number one job is to create jobs and protect the jobs we have,” said House Democratic Leader Dianne Byrum. “This package will go a long way in moving Michigan's economy forward and in creating the good-paying jobs of the future.”
“This deal is high octane fuel for Michigan’s economic engine,” Granholm added. “New investments and new incentives will create tens of thousands of jobs that can’t be outsourced and opportunity that will jumpstart economic growth across our state. The ink isn’t dry, but this is our first step – a great, bipartisan step – on the path to a bright economic future for Michigan.”
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