TAX NEWS - JUNE 2010

Detroit Tax: Granholm criticizes idea for a tax-free Detroit

by Mark Hornbeck, 03 June 2010 -- Gov. Jennifer Granholm challenged today the notion of making Detroit a citywide tax-free zone for 10 years, saying state and local taxes pay for services the city needs to attract businesses and residents.

Former U.S. House Speaker Newt Gingrich proposed the idea Wednesday during a speech at the Detroit Regional Chamber Mackinac Policy Conference. He said Detroit must be bold to make an economic comeback.

Granholm said today in a radio interview at Mackinac Island's Grand Hotel she doesn't see how such a plan would work.

"The state and local component provide direct services. Nobody's going to come to Detroit if there is no law enforcement," she said on WJR-AM (760). "Is Oakland County going to subsidize Detroit's law enforcement efforts?"

The governor also questioned whether Congress would be interested in excusing Michigan's largest city from federal taxes.

Granholm added that Gingrich's point was that Detroit needs to be bold, "and I agree with that."

She also repeated support for building the Detroit River International Crossing. She said the capacity is needed for border commerce and Canada won't grant permission to Ambassador Bridge owner Matty Moroun to erect a twin span.

"You can't build half a bridge. The only game in town is the DRIC," Granholm said.

Michigan cannot afford to allow the national economic recovery to distract from efforts to diversify the economy and upgrade education, the governor warned.

Granholm also drew a cheer from onlookers when she read a proclamation she wrote on Twitter declaring that Detroit pitcher Armando Galarraga tossed a perfect game Wednesday night despite a missed call by umpire Jim Joyce on a play at first base with two outs in the ninth inning.