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Data Centers Get Tax Breaks After All-Nighter From Michigan Lawmakers

Dec 16, 2015

Data Center
Credit Wikipedia Media Commons / wikipedia.org

Bills giving big tax breaks to Michigan data centers are headed to Gov. Rick Snyder’s desk.   Jake Neher has the story.

The legislation flewthrough the state House and Senate during a late-night session on Tuesday.  The goal is to lure a massive data farm to the Grand Rapids area.  “This opportunity is huge for the state of Michigan,” said state Sen. Dave Hildenbrand (R-Lowell).

Nevada-based data company Switch claims it will invest $5 billion and create a thousand jobs in Michigan over the next decade with its planned project in Michigan.  Critics of the Senate Bills 616 and 617 had previously said the legislation should include assurances that those job numbers will come to fruition.

On Tuesday, state House Democrats won amendments requiring the entire data center industry in Michigan to create at least 400 jobs by 2022 and 1,000 by 2026. Otherwise, the tax breaks would automatically end.  “We have assurances that the tax assistance that we are providing in this legislation to the data center industry will generate the jobs that have been promised,” said state Rep. Jim Townsend (D-Royal Oak). 

Still, Republicans and Democrats were both split on the bills.  Critics say it’s bad public policy to single out one industry for big tax breaks. And Republican opponents say the bills contradict GOP-led efforts in recent years to move away from industry-specific tax breaks.  “I refuse to surrender at this first far-away thunder from a company that heretofore to my knowledge has not been a taxpayer in Michigan,” said state Rep. Earl Poleski (R-Jackson).  “We owe greater diligence to our Michigan taxpayers and we should have greater confidence in the cards we hold not to fold at the first raise.”

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— Jake Neher is the State Capitol Reporter for the Michigan Public Radio network. Contact WEMU News at 734.487.3363 or email us at studio@wemu.org