Pfizer credit “corporate welfare,” some say

By, Mark Albert, News 3 Reporter

KALAMAZOO (NEWS 3)-- Even as Governor Engler and state economic officials hailed a $10 million tax credit as the best way to keep Pfizer jobs in Kalamazoo County, certain groups complained Wednesday that the specially tailored incentive was bad public policy and amounted to “corporate welfare.”

“We think that’s wrong,” said Ray Wilson, president of the Kalamazoo County Taxpayers Association, which opposes giving tax credits to businesses. “We think laws - especially tax laws - ought to apply to everybody and not just one particular corporation.”

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Wilson’s 450-member group opposed the state’s latest move to try and keep approximately 6,300 Pharmacia jobs in Kalamazoo County after it is acquired by Pfizer.

The Mackinac Center for Public Policy, based in Midland, also opposes tax breaks for businesses, arguing that the incentives are unfair and interfere with the market. “No company can be blamed for taking advantage of tax incentives,” said Mackinac Center legislative analyst Jack McHugh. “But on the other hand, the government shouldn’t be in this business of offering these kinds of incentives.”

Pfizer officials would not comment Wednesday on whether they would accept the state’s tax credit if they are successful in their bid to acquire Pharmacia. A decision from federal regulators about the merger is expected in December.

Pfizer’s $10M incentive: Is it enough?

KALAMAZOO (NEWS 3) - In a preemptive strike to keep Pfizer from cutting Pharmacia jobs in Michigan, Governor John Engler Wednesday signed two bills designed to encourage the company to stand pat.

Governor Engler signed the bills at the Kalamazoo Valley Museum.

Pfizer announced it was taking over Pharmacia in July. At the time, the company estimated that there would be about 2,000 unspecified job cuts at Pharmacia.

The bills give Pfizer an annual $10 million tax credit under the condition that they keep 8,500 jobs in the Kalamazoo and Ann Arbor areas. About 5,000 of those jobs must be in research and development.

State Rep. Tom George (R-Texas Township) said Michigan is competing against other states. “The one piece of the puzzle we were missing was this research and development tax credit,” he said.

Even as the bill was signed, members of the Michigan Economic Development Council were in New York making their pitch to Pfizer officials. The representatives say they were well-received, but were reminded that no decisions on jobs are imminent - and that the company never asked for such an incentive.

There is also a major issue working against Michigan: the state’s effort to cap prescription drug prices. “It is certainly helpful to have a state government who are supportive of the basic business model,” said Pfizer spokesman Nehl Horton. “That model can’t be sustained if states move to put price controls on medicines.”

The Pfizer takeover is expected to be finalized in November.