LANSING – State Representatives Mike "Huck" Huckleberry (D-Greenville) and Roy Schmidt (D-Grand Rapids) today voted to pass a series of bills that will create a state-level New Market Tax Credit (NMTC) program to help boost Michigan's economy by encouraging new investment in low-income and underserved communities across the state.
"Montcalm and Ionia counties need to be filled with lively downtowns that are the heart of our communities and the backbone of our economy," Huckleberry said. "Far too many of our downtowns have become shells of their former selves, which is driving away store owners and discouraging the creation of new businesses. This plan will draw new investments to our state, revitalize our communities and get Michigan on the road to economic recovery."
The legislation passed today will create $20 million in tax credits for individuals or businesses who invest in low-income communities or low-income residents. The state-level tax credits will work in conjunction with the federal NMTC program to encourage investment in underserved areas across Michigan. Since 2005, the federal NMTC program has helped create 18,000 jobs in Michigan and more than 255,000 jobs across the country.
Beginning in 2011, organizations who qualify for the tax credit will receive a credit of 5 percent for the first three years of the award, 6 percent for the fourth and fifth years, and 12 percent in the final year. To qualify as a low-income area, communities must either have a 20 percent poverty rate or a median income of less than 80 percent of Michigan's average income.
Just last week, Peckham Inc., a nonprofit organization that provides job training and placement assistance for people with disabilities and other barriers to employment, held a grand opening for its flagship building in Lansing – a LEED certified building that was made possible by the federal NMTC program. The new building consolidates Peckham's Lansing-based operations into one flexible facility, and gives Peckham the ability to expand by 200 to 300 jobs within the next 10 years.
The federal NMTC program was created in 2000 to encourage greater capital investments in low-income and underserved communities. Through 2008, the program authorized $19.5 billion in credits and has been widely acclaimed for its impact in low income communities. An additional $1.5 billion also has been authorized for both 2008 and 2009 as part of the federal American Recovery and Reinvestment Act.
"The best way we can pull our state out of this economic downturn is to invest in our businesses, residents and our world-class workforce," Schmidt said. "This plan is a big step in the right direction toward creating lasting jobs for our workers, cutting our unemployment rate and making Michigan an even better place to live, work, do business and raise a family."