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Fri May 20, 2011
Budget deal reduces dollars for redevelopment
The new budget deal struck this week between Governor Rick Snyder and Republican legislative leaders cuts the amount of money for redeveloping abandoned factories and preserving historic buildings.
The governor says the state won’t need to rely so much on targeted incentives in the future.
The new budget will zero out brownfield and historic preservation tax credits, and replace them with a new fund to offer economic development grants.
$50 million will be set aside for brownfields and historic preservation.
That’s $15 to $20 million dollars less than the state targets now.
But Governor Snyder says the state can do a better job of choosing projects "and hopefully make those dollars go farther than they are today."
Mark Morante, with the Michigan Economic Development Corporation, says the state will target only projects most likely to be completed.
In the past, many tax credits that were awarded went unclaimed. He also says the state won’t need to rely on incentives as much because tax changes will bring down the cost of doing business.
"With this six percent corporate income tax and roughly an 80 percent cut in corporate taxes in general, our job will be a little easier on that side of the table, so we will probably need less incentives," said Morante.
Those tax reforms have been criticized as a tax shift onto individuals. But the governor and his Republican allies in the Legislature say that will be worth it if it creates new jobs.