tax breaks

MIGOP / Instagram

Gov. Rick Snyder put services for immigrants and seniors at the top of his to-do list for 2014 in his State of the State speech yesterday.

The governor also promised to extend pre-school to every child in the state that wants to attend, and trumpeted the state’s economic recovery as he prepares to seek a second term.

"We are reinventing Michigan," Snyder said. "Michigan is the comeback state."

Snyder noted that hiring is up, and more people are looking for work — although Michigan still has one of the nation’s highest unemployment rates and many families living in poverty.

But the governor says things are getting better and the state’s improved budget position and the prospect of a revenue surplus is evidence of that. He said much of that money — more than a billion dollars over the next three years — should be used on infrastructure, investments, and savings. But he also said taxpayers should get some of it back.

“There’s going to be some opportunity for tax relief,” Snyder said.

A New York Times analysis casts doubt on the effectiveness of all those tax breaks Michigan cities have been giving to corporations in return for new jobs - or just to keep them from leaving town.

The story prominently features tax breaks given to General Motors, before the automaker filed for bankruptcy.

In the end, the money that towns across America gave General Motors did not matter.....

Jim Lynch / flickr

It appears legislation to allow people to claim a fetus as a dependent on their state taxes has stalled.

Plans to vote on the bills were scrapped, and they were removed from Monday’s state House Tax Policy Committee agenda.

Opponents of the measures called them a backhanded attack on access to abortions.

Committee Chairman Jud Gilbert said the issue has become too contentious.

There is something to be said for one party controlling both the executive and legislative branches of government. This year, for the second year in a row, the state budget will apparently be passed by the beginning of June. That’s a big change from a few years ago.

Twice during the Granholm years, the parties were still squabbling over the books when the fiscal year expired at the end of September. And bad last-minute choices were made.

www.michigan.gov

 It appears a budget deal between Governor Rick Snyder and the Legislature’s Republican leaders could include an election year tax cut. An early version of the proposal would accelerate a drop in the state income tax rate and increase the personal exemption.

The governor and G-O-P leaders want to wrap up the budget by the end of next week.

 Governor Snyder says he was skeptical at first, but he says revenue projections look promising enough to at least start talking about a tax cut for individuals and families.

Democrats in Lansing have outlined a package to help small businesses grow and hire unemployed people.

The plan includes taking a portion of the money that’s in a state trust fund and investing it in local banks and credit unions to make small business loans.

State Representative Vicki Barnett said that will help small businesses having trouble getting credit from larger banks and investment funds.

“We know that a very teeny investment can have huge dividends in terms of job creation and access to capital,” said Barnett.

“There is no other state that I know of that is taking this approach to aggressive investment – doing things they already do with taxpayer money and targeting it to grow jobs in their own state,”she added. 

The Democratic package would also allow small banks and credit unions to pool their finances to invest in larger projects.

Barnett says that would make larger loans possible while allowing the institutions to share the risk.

The plan also calls for a tax credit for small businesses that hire long-term unemployed people and veterans.

Republicans shy away from job creation credits. They say the state should not single out specific businesses for tax breaks.

MEDC

Together the projects will generate up to $602 million in new investments and create close to 2,000 new jobs.

By far the biggest project approved by the board this month is in Charlotte. Spartan Motors Chassis designs and manufactures a variety of special products for vehicles. They’re expected to add 450 new jobs along with an expanded facility.

George Bosnjak manages business development at The Right Place. It’s an economic development group in West Michigan. He helped two companies expanding in Grand Rapids get the tax breaks. Atomic Object LLC will expand its current location over a site in California. They expect to launch two new programs that’ll add 30 high tech software design jobs. Knape & Vogt Manufacturing Company makes all kinds of storage related components in Grand Rapids. They purchased a company in Illinois and will move production to Michigan, creating more than 120 new jobs.  

Bosnjak is optimistic about industry growth in West Michigan.

 “We really see a positive trend across all sectors, certainly nothing where it’ll turn around and change what’s happened over the last three years overnight but I feel that our economy and companies here are certainly moving in the right direction.”

However, Governor Rick Snyder is proposing to eliminate these and many other tax breaks. Bosnjak says they’re playing it by ear.

“I don’t think anyone really knows exactly what the programs will be and what the changes will be and how it’ll affect companies. But we’ll certainly deal with the tools that we have and make the best and do the best job that we can.

Snyder says the incentives inherently pick winners and losers when he says the state needs to create a simple and fair tax structure so all businesses are on an even playing field.

I was sifting through the many reports by Gongwer News Service.  Gongwer covers just about everything that happens in and around the Lansing capitol complex.  What caught my eye was an article entitled "State Estimates Tax Expenditures of $33.8 Billion for FY'11." 

I read through the Gongwer story which linked to a 111-page report by the Michigan Department of Treasury.

The deadline for businesses to apply for 2010 tax breaks is Oct. 31
whiteoaksblog.com

Local approval is one of the first hurdles companies must overcome to get the tax breaks they want. The deadline to get tax breaks in 2010 is October 31st. That means there's a surge of projects in front of local city councils and commissions.