It has been more 30 years since Michigan decided to give property tax breaks to industries to create job growth in the manufacturing sector. In a study by state universities it has been determined that tax abatements do not aid economic growth but they may actually be causing greater fiscal distress to many of the communities they have been granted to.

In part the reports findings concluded:

     - Michigan communities are losing up to $1 billion annually in tax revenue in a largely futile effort to attract and keep manufacturing jobs in Michigan.
     - With only a few exceptions the tax breaks did little or nothing to increase employment.
     - The abatements allow for reducing a company’s tax debt by 50%, in return for the guarantee there will be job creation or retention for up to 12 years. More often than not there is no follow up to verify  the guarantee has been upheld, and when verification is made often times the requirements of the guarantee have not been met.
     - Approximately 600 abatements are awarded each year with the net result of a $1 billion tax loss to the state.
     - Tax abatement are generally not monitored after they are awarded. 
     - Tax abatements renewals are often given to the same companies over and over again, often times forestalling their eventual failure.

Michigan needs to evaluate its business tax structure and reform it to make it a level playing field for all businesses and not just a select few. Continuing to modify our tax system with a patchwork of bad practices will only exacerbate the problem. Make sure when you vote this fall that you vote for the people who will fix our dysfunctional tax system.

(Submitted for publication to the Dewitt/Bath Review, Clinton County News, The St. Johns/DeWitt Informer, The Owosso Independent, The Laingsburg Independent & The Perry Independent on April 18, 2010)

(NOT PUBLISHED )
