LANSING, MI (AP)-- Recession-era tax incentives credited with heading off auto layoffs in Michigan are now cutting into state revenues when the budget could be flush with a rising economy.
One day in 2010, the state provided a massive $2.9 billion in tax credits if Detroit's car makers agreed to keep factory jobs on their home turf.
But the bill for the deals and ones in other states that used incentives aggressively is coming due and providing a lesson in their downside.
Even with a halt in new credits, Michigan is liable for $9.4 billion in old credits, which may reduce revenue $500 million annually for the next 15 years.
The budget outlook is also grim in Oklahoma, which awarded credits to wind energy developers and other industries to spur its economy.