Michigan lawmakers were surprised when Ford Motor Co. announced in 2021 that it would open a new battery complex in Tennessee and Kentucky. Michigan economic progress officials said they weren’t asked to check whether they fit in with tax cuts, infrastructure assistance and taxpayer money submitted through other states. The company’s resolution may jeopardize the millions of dollars in bills it collects from Michigan taxpayers.
The company has entered into an agreement with the state to qualify for refundable tax credits under the Michigan Economic Growth Authority program. The company receives 4. 25% of what it will pay its workers in the state.
As part of the settlement, Ford agreed to “make every effort to maintain jobs in Michigan by making decisions about the location of the plant and the closure of the plant. “
It’s unclear if the company went out of its way to see if Michigan would respond. Gretchen Whitmer said the state had not been asked to make its case or any special favors it could grant to the companies. “I’m trying to make Michigan more competitive and I’m willing to find solutions, but we want a genuine opportunity to do that. “that,” Whitmer said, according to an MLive account. And that wasn’t really the case here. “
Ford CEO Jim Farley told the Detroit News that the other locations were impressive for Michigan’s. “We didn’t do it state-to-state. We literally did it site-to-site and rated all the sites. We went to see them. It’s a very careful and arduous procedure with things we’ve never thought about before, like energy costs. And that’s what we got,” he said.
It’s unclear what would be at stake if lawmakers stopped the appropriations. The amount the company collects has been confidential, although the company has collected many millions more in credits than in liabilities. This means that the company receives money from the state, paid through other taxpayers.
The state reports that only 15 corporations benefited from MEGA tax credits in 2023. Revenue estimators expect corporations that profit from the MEGA settlements to collect about $500 million more in credits than they owe in taxes for the current fiscal year. In other words, just over a dozen corporations will get a billion dollars of cash from other taxpayers and taxpayers can’t know how much the corporations will get.
Ford’s announcement that it would locate its Blue Oval City allowance on the outskirts of Michigan has left lawmakers scrambling to create new programs. Since then, lawmakers have legalized $6. 3 billion in welfare for businesses.
Michigan Capitol Confidential is a collection of data produced through the Mackinac Center for Public Policy. Confidential Michigan Capitol Hill reports from a free-market data perspective.
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