Republican legislators push for lower taxes for businesses

Published November 29, 2005

LANSING (AP) - The Republican-controlled Legislature will push forward today with a revised plan to lower business taxes by $500 million over four years, with cuts targeted to help the state's struggling manufacturing sector.

Senate Majority Leader Ken Sikkema and House Speaker Craig DeRoche will announce the scaled-back legislation a little more than a week after Gov. Jennifer Granholm approved similar provisions in a larger business tax-cut package but vetoed others, killing the whole plan.

Manufacturers would receive a 15 percent credit for taxes they pay on equipment and computers starting Jan. 1, as well as a 100 percent investment credit in 2007 and 2008 if they bring jobs into Michigan. A special tax break for Delphi Corp. and Visteon Corp. that is scheduled to end next month would be extended, according to details of the legislation obtained by The Associated Press late yesterday.

Republicans said the legislation is more straightforward and simpler than bills they approved earlier this month.

"This isn't a complex deal or a complicated tangle of tie bars," Sikkema (R-Wyoming) said in a statement. "It's a simple plan with a single purpose: to get Michigan working again."

Granholm last week signed bills that included the same personal property tax credits, but they died because all the bills were tied together so that vetoing one killed the whole nine-bill package. The Democratic governor vetoed two bills, which she said contained huge tax loopholes, and said lawmakers should continue the state's main business tax beyond the end of 2009 so other taxpayers will not have to pick up the tab.

Granholm has previously pressed for the tax provision that helps Delphi and Visteon.

Spokeswoman Liz Boyd said yesterday that the governor is willing to work with Republican leaders on a solution that helps manufacturers, but she declined to comment further.

"It's difficult to comment on their proposal until we've had ample time to review it," she said.

The GOP legislation would not eliminate the sunset on the single business tax.

"That's not on our to-do list right now," Sikkema spokesman Ari Adler said.

Sikkema and DeRoche (R-Novi) said the legislation is the first of many bills the Legislature is planning to reduce the tax burden on businesses.

"This tax relief plan will take effect Jan. 1, providing an immediate boost to our economy and sending a signal to manufacturers and workers that Michigan is serious about keeping the thousands of jobs they provide in Michigan," DeRoche said in a statement.

The revised GOP plan would reduce state revenues by $90 million in the budget year that began Oct. 1. Sikkema spokesman Ari Adler said lawmakers do not anticipate making budget cuts because about $170 million in extra revenue is expected to come in.

Earlier Monday, Granholm said any tax-cut legislation sent to her desk must be bipartisan.

"If they insist on jamming something through the Legislature, it indicates they really don't want a compromise, they don't really want an agreement," Granholm said during a news conference. "That would be the greatest travesty of all for the state of Michigan. We are here and ready to talk."