LANSING – State Representatives Mike "Huck" Huckleberry (D-Greenville), Roy Schmidt (D-Grand Rapids) and Robert Dean (D-Grand Rapids) threw their support a bipartisan, bicameral plan Tuesday that will help make Michigan a leader in emerging high-tech industries by dramatically expanding the tax credits available to companies that are involved in the production, development and commercialization of advanced battery technologies. The original tax credits, signed by the Governor in January, offered businesses a potential $335 million in refundable tax credits.
"You can look out just about any window in our community and it's easy to see the effect this economic crisis is having on our workers," Huckleberry said. "At a time when far too many of our working families have already watched their jobs disappear, this plan will help attract growing high-tech industries that will bring countless good-paying jobs back to Michigan. We must continue to work across the aisle on this plan and act quickly to become a world leader in advanced battery industry and get our workers back on the job."
The bipartisan initiative would give an additional $200 million in tax credits for companies involved in all aspects of advanced battery development. These tax credits would be spaced out over the next four years, providing a continued benefit for new technologies and development. The plan also rewards companies who support fellow Michigan businesses by giving priority in the awarding of these tax credits to those who commit to using local suppliers.
The plan builds on the last tax credit initiative, which was the first of its kind in the United States and passed with overwhelming bipartisan support. The law authorized the Michigan Economic Growth Authority (MEGA) to provide refundable tax credits totaling up to $335 million battery pack assembly; research and engineering to support battery use in vehicles; engineering of advanced battery technologies; and capital investment for construction of battery manufacturing facilities. MEGA awarded the first of these tax breaks last month to GM, for the production of lithium-ion batteries for the upcoming Chevy Volt.
"Passing this plan will mean so much to so many of our working families," Schmidt said. "The auto industry is the backbone of our state – providing jobs for not only our manufacturers, but also for auto suppliers and researchers across the state. The industry as a whole and hundreds of thousands of our working families will benefit from the growth of these emerging industries. Just as Michigan became a world automotive leader during the dawn of the automobile era, we also can lead the charge into a new era of hybrid and electric car production."
Under the most conservative estimates, the battery tax credits will create over 40,000 jobs and over $9 billion in economic activity by the year 2020, according to the Center for Economic Analysis at Michigan State University. The most likely scenario would see Michigan gaining nearly 90,000 jobs and over $18 billion in economic activity as result of the initial $335 million program.
"This is a great opportunity for Michigan to build on our success," Dean said. "The original tax credits that we passed have put Michigan ahead of the game. With President Obama's commitment to green energy and the thousands of good-paying jobs that will be created in the coming years, we must pass this plan to ensure Michigan does not lose these jobs to other states and countries."