"The major reduction in personal property taxes for manufacturers is a critical piece of the Michigan Jobs and Investment Act," said John "Mac" MacIlroy, president and CEO of the Michigan Manufacturers Association. "It will encourage investment, and as this study demonstrates, that investment will create jobs."

The report, prepared by Ernst & Young, estimates that businesses will increase their investment in Michigan machinery, equipment and structures by $1.65 billion within five years in response to the new property tax credit.

Including both the direct increase in manufacturing jobs and the indirect and induced economic impacts on all industries from the statewide economic multiplier, the property tax credits are expected to generate 30,000 total new jobs by 2011. In addition, the simulations indicate that the job impact may grow by another 15 percent to 35,000 new jobs by 2015.

"In developing this projection, we first estimated the expected response of new capital investment in manufacturing to the reduction in the cost of capital in Michigan, and then translated the change in business investment into additional Michigan jobs throughout the economy," said Robert Cline, Ernst & Young national director of state and local tax policy economics.

"In five years, the personal property tax reduction aimed at manufacturers will create an additional 9,000 manufacturing jobs in a variety of sectors, including computers and electronic products and plastics as well as the auto segment. Those jobs will generate an additional 21,140 indirect and induced jobs, many in the service sectors, based on a fairly conservative multiplier of 3.35. The property tax reduction proposal will lead to creation of 30,140 total new jobs by 2011, and possibly as many as 35,000 new jobs by 2015," Cline said.

MMA Vice President for Government Affairs Chuck Hadden said the MMA had asked Ernst & Young to focus on the personal property tax cuts in its jobs analysis. He said Ernst & Young had indicated that an initial analysis of the combined effect of the other components of the Michigan Jobs and Investment Act could reduce the 30,000 job increase created by the personal property tax reduction by about 5 percent, or 1,500 jobs.

"The Michigan Jobs and Investment Coalition can now say with confidence that the Michigan Jobs and Investment Act will create an estimated 28,500 new jobs over the next five years, without forcing major cuts in the state's budget," said Hadden. "We hope that lawmakers will take this information into consideration as they move forward in their discussion of this important proposal and any potential alternative."

The Michigan Jobs and Investment Coalition includes the Michigan Manufacturers Association and major companies such as General Motors, Ford, Chrysler, Delphi Corporation, Herman Miller, U.S. Steel, Neogen, members of the Michigan Forest Products Council, the Michigan Chemistry Council, the Michigan Electric Cooperative Association and many more, organized labor, including the AFL-CIO and the United Auto Workers, and the Michigan Municipal League. Other supporters of the proposal include Oakland County Executive L. Brooks Patterson, the Bay County Growth Alliance, and Doug Rothwell, former Gov. John Engler's chief economic development official.

Robert Cline, the Ernst & Young National Director of State and Local Tax Policy Economics, has a Ph.D. in Economics from the University of Michigan. He formerly served as director of the Office of Revenue and Tax Analysis in the Michigan Department of Management and Budget and as director of the Tax Research Division of the Minnesota Department of Revenue.

More information is available at http://www.michigantaxfairness.com/

Source: Michigan Manufacturers Association

CONTACT: David Waymire, +1-517-485-6600, for Michigan Manufacturers
Association

Web site: http://www.michigantaxfairness.com/