LANSING, Mich. (AP) — Michigan legislators were working Tuesday to pass a $1.5 billion bill with state incentives to land major business projects, including an electric vehicle battery factory that General Motors wants to build in the Lansing area.
Once Gov. Gretchen Whitmer signs the funding and related bills into law, $1 billion will go to the new Strategic Outreach and Attraction Reserve Fund. Legislative budget committees would have to approve transfers from the account to new site readiness and “critical industry” funds before Michigan’s economic development board could distribute grants, loans and other assistance to companies.
A House-Senate conference committee was expected to meet Tuesday night, and lawmakers remained in session to vote before adjourning for the year.
As part of the deal, the Democratic governor will sign roughly $410 million in tax and fee relief for business owners whose operations were affected by pandemic restrictions. The Republican-controlled Senate also approved a $75 million tax cut for businesses that pay taxes on nonindustrial equipment and personal property. The exemption, based on the value of the equipment, would rise from $80,000 to $180,000 per parcel.
The Lansing City Council on Monday began approving local tax breaks for the proposed GM project, which could cost up to $2.5 billion and employ as many as 1,700 workers. Business leaders and lawmakers have said Michigan is in the mix for at least two other big deals that could be announced as soon as January.
Michigan-based automakers qualify for generous job-retention tax credits under an old economic development program, and some businesses were awarded tax incentives through a newer initiative that expired in 2019. But supporters of the new incentives say the state cannot compete with what other states are offering, despite criticism that such corporate subsidies are unfair to other companies and could be better spent on government services.
Talks about boosting incentives had been underway but intensified after Ford Motor Co. announced plans to build an electric vehicle assembly plant and three battery factories in Kentucky and Tennessee.
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