MACKINAC ISLAND, MICH. - The state of Michigan is hoping to use some proposed tax incentives to lure Taiwanese electronics giant Foxconn, according to two sources knowledgeable about the state's efforts.
The company, which produces television screens, wants to invest $7 billion in a production plant in the United States. Foxconn founder and CEO Terry Guo told reporters in January that he wanted to invest in the United States, but would need economic incentives to do so.
The "Good Jobs for Michigan" tax incentives, which have passed the Senate but not the House of Representatives, would be tailor-made for companies that want to make big investments in the state. On Mackinac Island Thursday, Gov. Rick Snyder and a host of business and economic development officials implored the House of Representatives to pass the incentives quickly in order to help lure companies who might want to relocate to Michigan.
Snyder wouldn't identify any companies that he's working with, but said, "These are companies I’ve talked to or consultants for those companies. There are a couple that are in the 2,000-job range that are active opportunities. Your next question is who, and I’m not going to tell you. But we could lose opportunities if this doesn't take place in the next month or so."
Sources said that several states are vying for the Foxconn business.
Matt Gibb, deputy Oakland County deputy executive, says he has five deals ready to go when he leaves for a trade mission to Europe early next month.
But he won't be able to seal the deals unless the Legislature passes tax-incentive bills that could lure large companies to the state.
"They don't even look at us right now," he said, declining to reveal the names of companies. "We would have competed for the Boeing factories that went to the Carolinas. We had six companies choose Alabama instead of us. There is a list of companies that we've engaged in the 400-1,000 jobs range, and we can't make the numbers work for them."
The legislation passed the Senate in March and is awaiting action in the Michigan House, where members are more wary of target tax incentives.
Speaker of the House Tom Leonard, R-DeWitt, said he's not convinced that targeted tax cuts are the way to go.
"For me personally, I have reservations anytime we talk about targeted tax credits," he said.
The "Good Jobs for Michigan" bills would:
- Allow businesses that expand or relocate to Michigan to receive up to a 10-year, 100% abatement on the personal income tax withholdings of new employees if at least 250 new jobs are brought to the state, at wage rates that are at least 125% above the average for the region.
- The incentive would be a five-year, 50% abatement on those withholdings for companies that bring in at least 500 jobs that pay the average wage for the region.
The businesses would have to prove the jobs were created before they could qualify for the incentive and would be audited by an independent third party to ensure those jobs are maintained.
The incentive program would be limited to 15 new projects per year, with a maximum value for all outstanding projects at any time capped at $250 million.
The bills -- SB 242-244 -- are now under consideration in the House.
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