Michigan Paying The Price Now For Tax Plan To Save Business

LANSING, MI (WLNS) – Recession-era tax incentives credited with heading off auto layoffs in Michigan are now cutting into state revenues when the budget could be flush with a rising economy.

One day in 2010, the state provided a massive $2.9 billion in tax credits if Detroit’s car makers agreed to keep factory jobs on their home turf.

But the bill for the deals – and ones in other states that used incentives aggressively – is coming due and providing a lesson in their downside.

Even with a halt in new credits, Michigan is liable for $9.4 billion in old credits, which may reduce revenue $500 million annually for the next 15 years.

The budget outlook is also grim in Oklahoma, which awarded credits to wind energy developers and other industries to spur its economy.

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