LANSING – Representative Joel Sheltrown (D-West Branch) today lauded a bipartisan, bicameral plan 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.
"This plan shows our state is aiming to make Michigan attractive to high-tech industries," Sheltrown said. "We need to continue bringing these industries and good-paying jobs to our state in order to help our residents who have been affected by these tough economic times. This plan will ensure we don't lose more jobs to other states or countries."
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 for 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.
Under the most conservative estimates, the battery tax credits will create more than 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.
"Michigan must remain a key producer for the auto industry," Sheltrown said. "By growing the emerging alternative-fuels market we are showing our willingness to evolve and provide consumers with the vehicles they are demanding. These changes will be the shot in the arm the auto industry and Michigan's economy needs to get back on track."