Michigan sent a clear message this summer to the rest of the nation and world that it's open for business when lawmakers and governor approved a critical economic development tool - smart, transparent tax incentives to compete for large-scale projects and attract good-paying jobs in communities across the state.
THE NEED FOR A NEW TOOL
By nearly all leading indicators, Michigan has come a long and remarkable way in its economic recovery and rebuilding a strong economic climate. West Michigan is a shining example with Grand Rapids recently being named the fastest growing economy in the country.
At the same time, other states made progress too. And the Great Lakes State - the only other state besides Alaska with no tax incentive tools for attracting significant projects - was facing a growing threat from the robust incentives other states around the country use to attract and create jobs. The competition - nationally and globally - is fierce.
Many factors go into a company’s location decision – from skilled talent to energy costs and infrastructure. The lack of state tax incentives for large-scale projects was keeping Michigan and our region off too many company site selection lists. It was letting other states lure away the businesses and jobs that should be coming to or growing right here in West Michigan or other communities across the state.
THE COALITION EFFORT, OUTCOME
The Good Jobs for Michigan legislation was drafted and a coalition launched to ensure a level playing field for Michigan to compete. More than 65 leading business and economic development, community and labor organizations came together to showcase the need and advocate for change, including The Right Place.
The legislation was passed with wide bipartisan margins in the Michigan Legislature and signed into law by Gov. Rick Snyder on July 26, 2017. It officially took effect and become an available tool for potential projects 30 days later, with the Michigan Economic Development Corporation formally adopting guidelines on Sept. 27, 2017.
The program works by creating a transparent, predictable and performance-based tax incentive program that doesn’t favor one industry over another, but instead focuses on projects that will bring significant numbers of jobs to communities.
Under the program, business expansions or new locations creating a minimum of 500 new jobs and paying 100 percent or more of the average regional wage are eligible to capture up to half of the personal income tax (PIT) withholding of new employees for up to five years. Those creating 250 new jobs and paying 125 percent or more of the average regional wage – and those creating 3,000 new jobs at a 100 percent or more – would be eligible to capture up to 100 percent of the PIT withholdings for up to 10 years.
A total of 15 projects per year can be authorized with a cap of $200 million for all projects.
To learn more and get specific details about the program, contact our business development team at: 616-771-0325 or email@example.com.