Michigan’s New Laws Aim to Boost Business Growth and Innovation
In a bid to foster economic development and retain local talent, Michigan Governor Gretchen Whitmer has enacted new legislation designed to support business research and development. The newly signed laws introduce tax incentives and investment programs, targeting both large and small businesses across the state.
Under this legislation, companies engaged in research and development (R&D) can now benefit from tax credits. Businesses employing 250 or more workers are eligible for a tax credit of up to $2 million annually, while smaller businesses can claim up to $250,000 each year. This marks a significant shift, as Michigan was previously the only state in the Midwest without an R&D tax credit program. For further details, visit the official document.
State Representative Alabas Farhat (D-Dearborn) emphasized the importance of these changes, highlighting their potential to curb the exodus of entrepreneurs from Michigan. “It’s causing a brain drain. It’s causing our best and brightest to start somewhere else. And what we’re doing is we’re creating an opportunity for our homegrown talent here in Michigan to stay in Michigan, to employ in Michigan, to invest in Michigan,” Farhat remarked during the bill-signing event in Detroit.
Additionally, the legislation establishes a new state fund designed to invest in venture funds that support startups. An annual return of $60 million from these investments will be redirected to the Michigan Innovation Fund Program, perpetuating the cycle of investment and growth. Governor Whitmer praised the program as “fiscally responsible” and “great for taxpayers,” stating, “When we invest in an entrepreneur and their business makes money and creates jobs, it’s the people of Michigan who benefit. We’ll also put the money we invested right back into the innovation fund so we can help even more startups in a sustainable way.” More information on the program can be found here.
Despite bipartisan support, the new policies have faced criticism, with some arguing against directing state funds to profitable companies. Meanwhile, Governor Whitmer addressed the media for the first time since the previous legislative session ended abruptly, leaving several bills pending. These include matters related to retirement plans for corrections officers, health insurance premiums for state employees, and tax measures for history museums.
Republican House Speaker Matt Hall (R-Richland Twp) has taken steps to delay sending these bills to Governor Whitmer, citing the need to ensure there are no “technical problems” with them. For more on Hall’s stance, visit the full article here. Governor Whitmer, however, expressed her willingness to wait for Hall’s decisions, stating, “I’m not going to prejudge what is happening with the bills. I know that Speaker Hall has said they’re doing a legal review that’s in his purview. He’s now the speaker of the House. But we’ll continue to wait and expect those bills shortly I would imagine.”
The state constitution mandates that bills passed by the legislature be sent to the governor, but it does not specify a timeline for this process.
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