LANSING Gov. Jennifer Granholm signed legislation Wednesday to amend the Michigan Economic Growth Authority to allow companies to count multiple job locations in consideration for a MEGA tax credit a move aimed at keeping Federal-Mogul from transferring jobs outside the state.
The statutory changes will strengthen Michigan’s efforts to retain Federal-Mogul which said it may cease operations at one or both of its plants in St. Johns and Greenville to relocate where operating costs are significantly lower, potentially eliminating up to 800 jobs.
The new legislation allows a new incentive package anchored by a MEGA tax credit to be offered to Federal-Mogul to encourage the company to keep its operations in Michigan. In the future, the flexibility in the law will enable the state to intervene more quickly and more nimbly to retain Michigan jobs, the governor said.
“MEGA is clearly the flagship of Michigan’s economic development efforts,” Granholm said. “I worked hard with the Legislature to make changes that will increase MEGA’s flexibility and effectiveness. From today onward we will better be able to address the challenges employers face in the fast-changing 21st-century economy, and retain more jobs for Michigan families.”
Granholm is under a lot of heat from the Michigan Republican Party, lead by Betsy DeVos, to stem the rising tide of manufacturing jobs leaving the state.
Administered through the Michigan Economic Development Corporation, the MEGA program has the authority to award Single Business Tax Credits as incentives to companies choosing to grow in Michigan over competing sites in other states and countries.
Until Wednesday the MEGA statute required a company to retain a minimum of 500 jobs at a single Michigan location to be eligible for the credit. As a result, companies with a total of more than 500 workers spread across more than one Michigan location, but not at any single site, were not eligible.
Key changes expected to benefit Federal-Mogul and other Michigan companies that maintain multiple locations in the state include:
Jobs at multiple sites of a business or its subsidiaries may now be included in the job count;
The minimum number of jobs retained at a single site is lowered to 150 from 500, with at least 1,000 total jobs at multiple Michigan locations.
An exemption is allowed from the current requirement for the host community to provide a contribution, usually in the form of a tax abatement. This enables companies with multiple sites to receive a local contribution at some but not all of its sites to help lighten the burden of foregone taxes on the host communities.
