LANSING – Genesee County lawmakers today voted for a series of bills that will create a state-level New Market Tax Credit (NMTC) program to help boost Michigan's economy by encouraging new investment in low-income and underserved communities across the state.
"Creating a stronger business climate for Michigan will attract more businesses and create jobs for our workers," said State Representative Lee Gonzales (D-Flint Township). "These incentives will spark investments in local communities that will help those who have been hit hardest in this economy. This is a powerful investment in our workers, our community and our state."
The legislation will create $20 million in tax credits for individuals or businesses who invest in low-income communities or low-income residents. The state-level tax credits will work in conjunction with the federal NMTC program to encourage investment in underserved areas across Michigan. Since 2005, the federal NMTC program has helped create 18,000 jobs in Michigan and more than 255,000 jobs across the country.
Beginning in 2011, organizations who qualify for the tax credit will receive a credit of 5 percent for the first three years of the award, 6 percent for the fourth and fifth years, and 12 percent in the final year. To qualify as a low-income area, communities must either have a 20 percent poverty rate or a median income of less than 80 percent of Michigan's average income.
"Empty homes, empty buildings and empty storefronts have become the defining picture of this recession," said State Representative Jim Slezak (D-Davison). "This is a plan that's targeted at getting Main Street back on its feet. If we're going to get our economy turned around, we need to start from the bottom up, and that means getting tax breaks to the local businesses that best grow our economy."
Residents in Detroit are benefiting from three NMTC investments, including a renovation of a former General Motors building sponsored by the College for Creative Studies, which has created more than 210 construction jobs, 200 permanent jobs and 300 new school seats; a fourth campus for the University Preparatory Academy, which created 30 construction jobs and 27 positions at the school; and TechTown's 300,000-square-foot business incubator where more than 70 businesses in the fields of public health, biobanking, life sciences, alternative energy, education and advanced manufacturing are creating new economic opportunities and jobs in the Detroit area.
Just last week, Peckham Inc., a nonprofit organization that provides job training and placement assistance for people with disabilities and other barriers to employment, held a grand opening for its flagship building in Lansing – a LEED certified building that was made possible by the federal NMTC program. The new building consolidates Peckham's Lansing-based operations into one flexible facility, and gives Peckham the ability to expand by 200 to 300 jobs within the next 10 years.
The federal NMTC program was created in 2000 to encourage greater capital investments in low-income and underserved communities. Through 2008, the program authorized $19.5 billion in credits and has been widely acclaimed for its impact in low income communities. An additional $1.5 billion also has been authorized for both 2008 and 2009 as part of the federal American Recovery and Reinvestment Act.