Michigan House considers bill that would speed up tax breaks for state's auto suppliers
Tim Martin, Associated Press Writer
Wednesday March 25, 2009, 5:30 pm EDT
LANSING, Mich. (AP) -- Struggling auto suppliers who need a quick infusion of cash and are already receiving state tax credits would get a lump-sum payment under a plan being considered by the Michigan House.
The proposal passed Wednesday by a House committee would give auto suppliers who already receive multiyear Michigan Economic Growth Authority tax credits all the money up front before 2011. In some cases, the credits now are provided over a decade or more.
The proposal is designed to give financially troubled auto suppliers a cash infusion and give them an incentive to consolidate their operations and preserve jobs in Michigan.
The proposal, which likely soon will come up for a vote on the House floor, would be limited so it could not cost the state more than $250 million. The bill itself does not provide a way to pay for the program, but House Speaker Andy Dillon said he is working with the state Treasury on a possible mechanism to avoid costing the state any general tax revenue. That mechanism could include a revenue bond that would be paid off with revenue from Michigan's main business tax.
"It'll pay for itself, in my mind," said Dillon, a Democrat from Wayne County's Redford Township. "I intend that we pay for this and not do damage to the general fund."
Auto suppliers are hurt by many of the same economic trends hammering auto assembly giants such as General Motors Corp. and Chrysler LLC. Dillon, along with Republican legislative leaders and Democratic Gov. Jennifer Granholm, have visited Washington to lobby for aid to suppliers.
Granholm spokeswoman Liz Boyd said the administration will work with lawmakers to come up with a way to pay for the proposal.
"Clearly, we want to help auto suppliers," Boyd said. "They are such an important part of the auto industry."
Senate Majority Leader Mike Bishop, a Republican from Rochester, plans to monitor the U.S. Treasury Department's plans to provide $5 billion in financing to troubled suppliers before jumping in at the state level.
"The federal government has announced a significant stimulus package for the suppliers so it may be prudent to see what the impact of that money is on the industry before the state weighs in," Bishop spokesman Matt Marsden said in an e-mailed statement. "This shouldn't indicate that we are unwilling to discuss this option or some variation if the federal relief falls short of the desired effect."
