LANSING – State Rep. Alma Wheeler Smith (D-Salem) today threw her support behind 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.
"Investing in high-tech industries such as advanced battery manufacturing is a key strategy in creating good-paying jobs for Michigan workers," Smith said. "These incentives have already proven successful, and we need to act fast to keep the economic momentum going. With the talent available at our universities and our top-notch workforce, this plan positions Michigan to be a leader in this new industry."
The 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 nation and passed with overwhelming bipartisan support. The law authorized the Michigan Economic Growth Authority (MEGA) to provide 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 building battery manufacturing facilities. MEGA awarded the first of these tax breaks last month to GM, for production of lithium-ion batteries for the upcoming Chevy Volt.
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 an amazing opportunity to get in on the ground floor of a growing industry," Smith said. "The advanced battery field creates jobs for manufacturers, researchers, auto suppliers and more. We cannot afford to lose these jobs to other states and countries, so I hope my colleagues on both sides of the aisle can work together to pass this plan quickly."