Michigan faces years of budget uncertainty because state leaders awarded billions of dollars in tax credits mostly to Detroit's three automakers to save tens of thousands of manufacturing jobs during the Great Recession.If only Borders bookstores bribed enough politicians , in Michigan, they might be around today.
A Detroit News analysis of state records found General Motors Co., Ford Motor Co. and the former Chrysler Group LLC are entitled to refundable tax credits worth nearly $4.5 billion if they retain more than 86,000 jobs in Michigan through 2032 — or nearly 70 percent of their current, combined in-state workforce. The subsidies require the three automakers to spend a combined $5.5 billion in upgrading assembly plants and other facilities in Michigan.
Former Gov. Jennifer Granholm's administration awarded the three automakers the massive tax credit packages as the companies fought for survival in 2009 and 2010, trying to ensure the domestic auto industry stayed anchored in Michigan. The plan worked, but the bills are coming due.
The costs promise to escalate because the Michigan Economic Growth Authority tax credits are tied to the wages, overtime, lump-sum payments and profit-sharing checks of the covered workers. Analysts and company insiders expect wages at the resurgent automakers to grow further after national contract bargaining with the United Auto Workers this year.
Thursday, February 05, 2015
Michigan pays price for auto investment : Looting the Taxpayers Has Consequences
The Detroit News reports:
