Tuesday, August 30, 2011

Michigan Democrats Go on Record With Support for Battery Industry

Do I expect the Republicans to listen? No. Bipartisanship is dead in Lansing, and Democrats do not have a voice. That much has been made very clear. But, let the record reflect that it was the Democrats who moved to strengthen and advance this job-creating industry while the Republicans twiddled their thumbs and offered nothing but banal statements about their support for this so-far very successful economic development in Michigan.

At a series of seven press conferences held across the state, Democratic legislators trumpeted the previous track record: As of December 2009, Michigan's auto battery incentives have attracted more than $3 billion in new investments and created more than 6,600 new jobs.

Democratic Sen. Steve Bieda of Warren said the state-of-the-art battery laboratory at the General Motors Tech Center would have been located elsewhere without the previous state tax breaks. While serving in the House, Bieda was the first lawmaker to propose tax credits to lure the battery industry, which was tied to the burgeoning of electric-powered vehicles.

The Democrats aren't asking for the moon here, just some simple credits to easier facilitate production and purchase of electric vehicles, from supply chain on down to the consumer.

• Tax credits for battery producers and manufacturers, including battery-pack manufacturing, facilities construction, vehicle integration and others.

• Substantial income tax credits for people who buy an electric vehicle made in Michigan.

• Tax credits for the purchase and installation of electric vehicle charging stations.

• And a $50 million grant from the “economic gardening” fund established by the Snyder administration to cultivate existing Michigan businesses. The grant for electric vehicle and battery businesses would come from existing funds in the Michigan Economic Development Corp.

The Snyder response? Predictable. And uninspiring.

“The state is working overtime to retool Michigan’s economic development programs and funding so that not only the battery industry, but all industries, thrive and that Michigan is the place to do business, live and work,” Wurfel said. “And also (we will) be able to take full advantage of strategic growth opportunities, which may well be the advanced battery industry.”

Zzzzz. Oh, sorry, drifted off there. MEDC released its plans for the new tax credit program just recently with the same vanilla flavor, indicating that there will be $100 million available for "loans or other economic assistance of up to $10 million to businesses that are creating qualified new jobs and making new investments in Michigan." Not sure what "qualified" new jobs entails, or if MEDC's "gardening" budget is separate from this (if I'm not mistaken, the gardening portion has more to do with loans than credits or grants), but there doesn't seem to be a coherent strategy for targeting high-growth sectors anymore. Add that to the fact that companies are going to have to do a dance for the Legislature to receive any consideration for a capped amount of incentives, while other states are rolling out the red carpet of convenience, and you can start to foresee all sorts of problems with Snyder's economic plan. The competition is fierce out there, and so far Republicans in Lansing seem to be more focused on cutting state services than they are on creating jobs. So be it.

We should be set for now, the battery factory roots planted pretty deep with the current credits and the funding from the Recovery Act, but the second someone leaves for Indiana or Ohio? Nail the idiots to the wall.

And, if we lose them to overseas competition, well, that's on Congress - which is a whole 'nother blog post.