Warren: Any data-center tax breaks require accountability
A Nevada-based multibillion-dollar company wants to take over the Steelcase pyramid in Grand Rapids and develop a data center. The company, Switch, promises 1,000 well-paying jobs over the course of its development, as well as a $5 billion investment in our state.
There’s a catch.
The firm won’t come to Michigan unless our Legislature carves out significant tax exemptions by the end of this year. To locate here, Switch is looking for a complete exemption from sales, use and personal property taxes. While passing this legislation wouldn’t necessarily bind us to future payments, these tax exemptions would shortchange our School Aid Fund, General Fund and funds that our local communities rely on.
Both sides of the aisle want to attract this kind of industry to our state. But rushing legislation to meet corporate demands without accountability measures or a proper fiscal analysis is foolish.
We already have a thriving data center industry in this state. We have data centers in the capital city of Lansing, in my district in Ann Arbor, and across the state from Grand Rapids to Detroit, Southfield to Alpena. These companies weren’t afraid to make investments in Michigan, and they found it a fertile place to find talent and grow without asking for tax breaks. It’s worth asking why we need to give away so much revenue potential to get one more company to locate here.
In the past, the Legislature has made some special tax policy exemptions for a particular company or industry, and those exemptions have proven challenging to integrate into our budget. And for what? Many of the promises these companies have made haven’t been honored in the long term.
So we need Switch to meet us in the middle.The company should provide us with the minimum number of direct jobs that would be created, the salary minimums and the date by which all those will be met. All that must be guaranteed, as part of the legislation. We also need to ensure the companies that have been investing in our state aren’t unduly harmed by a competitor who doesn’t have to play by the same rules.
We want Switch to invest in our state, and we want to create the kind of jobs that boost our middle class and help us keep more of our top-notch, tech-minded students right here in Michigan.
Lawmakers need to negotiate protections for our taxpayers’ dollars. We we can’t allow a corporation to hold the state ransom without allowing for proper due diligence.
State Sen. Rebekah Warren is an Ann Arbor Democrat.