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Governor signs phaseout on business and industrial equipment tax

A123 Systems Inc.'s battery manufacturing facility in Livonia, Michigan. The company filed for bankruptcy on Tuesday.
A123 Systems Inc.
A123 Systems Inc.'s battery manufacutring facility in Livonia, Michigan.

Governor Rick Snyder has signed a plan to phase out the state’s tax on business and industrial equipment.

Manufacturers, in particular, say the tax discourages investment in Michigan.

Charlie Pryde is a lobbyist for Ford.

“We believe the reform package the governor is signing today will make Michigan more competitive for manufacturing and Ford Motor Company more competitive in the intensely competitive automotive manufacturing marketplace,” Pryde said.

The phaseout could cost local governments some revenue, although the governor promises there will be no cuts in funding for schools, police, fire, and jails.

“This is very good news for all Michigan, the way I view it. In particular, we’re talking about economic development, the ability to make us more competitive, the ability to create more jobs. It’s very exciting,” Snyder said.

Voters will have to approve a plan for replacing that revenue on the 2014 statewide ballot.

The governor’s signature on the legislation follows news that Michigan’s unemployment rate inched downward in November—but only because thousands of people quit looking for jobs and are no longer measured as part of the workforce.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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