Chatfield Bill Targeting BILLIONS In SECRET Corporate Welfare Sails Through Committee, Likely To Pass House

State Rep. Lee Chatfield, center, talks to Paul Mitchell, left, and MLive's Jonathon Oosting at an Anti Prop 1 event in Lansing (Photo By Darlene Dowling Thompson)

  
By Brandon Hall
 
(Email him at WestMiPolitics@Gmail.com)

(Update: This bill passed the full House today!)

A few weeks ago, WMP wrote about a bill recently introduced by State Rep. Lee Chatfield. The legislation would prevent the Michigan Economic Development Corporation from signing into any more agreements that distribute taxpayer dollars through checks to corporations called "MEGA Credits."

Michigan families are already on the hook for billions in corporate handouts while roads crumble, and Chatfield wants to stop future liabilities for Michiganders.

The bill received a vote in committee this week, and passed unanimously. Given that these "MEGA" credits are largely responsible for the recent budget shortfall after a company randomly cashed in on $300 million worth of them, and that the bill was approved 12-0 in committee, expect the bill to pass when it reaches the full House. Where it goes in Meekhof's Senate remains to be seen...(The bill did indeed pass today, May 7th)

Oh yeah: the billions of taxpayer dollars being handed out? Chad Livengood of the Detroit News has revealed the state is keeping them SECRET, refusing to release them!

Check out the article below from 4/16, which includes comments from Chatfield, as well as the actual bill itself and analysis from the House Fiscal Agency. It also has part of Livengood's article.
 

State Rep. Lee Chatfield testifies in Lansing April 15th.

INSANITY: Chatfield Legislation Would End Billions In SECRET Corporate Welfare

State Rep. Lee Chatfield thinks it's time to end billions in corporate welfare in Michigan-what we can of it, anyway.

The cash, dispersed via the Michigan Economic Development Corporation through checks to corporations called "MEGA" tax credits, costs Michiganders almost $10 billion. Remember Michigan's random budget shortfall this year? A company cashing in approx. $300 million of "MEGA" credits is to blame.

While Michiganders are evidently already on the hook for billions, Chatfield's legislation, House Bill 4333, seeks to stop the bleeding, preventing the program from any more growth in the future by ending the MEDC's ability to enter into any more agreements with companies seeking state cash.

Chatfield touted the bill in testimony today, quite fitting for April 15th. In a  Facebook statement, Chatfield said:

"On this 'TAX DAY' I testified on HB 4333, my legislation to protect hardworking taxpayers from additional liability due to budget-busting Michigan Economic Growth Authority (MEGA) corporate tax credits. My bill prohibits the state from extending the costly credits. A $9.38 billion estimated liability is projected to be incurred over the next 17 years. 

This year alone, the credits created a $325 million state budget shortfall. Now it’s up to us to ensure that the mess created during the previous administration is cleaned up not only for current Michigan taxpayers, but for our future generations."

Chatfield's legislation says:

 "BEGINNING JANUARY 1, 2015, THE AUTHORITY OR ITS SUCCESSOR SHALL NOT ENTER INTO A NEW WRITTEN AGREEMENT WITH AN ELIGIBLE BUSINESS OR MODIFY OR AMEND AN EXISTING WRITTEN AGREEMENT WITH AN AUTHORIZED BUSINESS, FOR A CERTIFIED CREDIT UNLESS THE MODIFICATION OR AMENDMENT REDUCES THE NET AMOUNT OF THE CREDIT TO THE AUTHORIZED BUSINESS.

HOWEVER, THE AUTHORITY OR ITS SUCCESSOR MAY MODIFY OR AMEND AN EXISTING AGREEMENT WITH AN AUTHORIZED BUSINESS FOR TECHNICAL CHANGES AS LONG AS THE MODIFICATION OR AMENDMENT DOES NOT INCREASE THE NET AMOUNT OF THE CREDIT TO THE AUTHORIZED BUSINESS.

UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY OR ITS SUCCESSOR MODIFY OR AMEND AN EXISTING AGREEMENT TO PROVIDE THE AUTHORIZED BUSINESS WITH A LONGER TERM TO CLAIM THAT CREDIT."

According to the House Fiscal Agency, the bill could be positive for taxpayers.

" House  Bills  4333  and  4334  would  have  an  indeterminate,  but  potentially positive, fiscal impact on state revenues.  Any fiscal impact would be directly correlated to the number of amendments foregone due to the provisions of the bill.To the extent that the bills reduce the value of outstanding credits by limiting the ability to amend existing agreements, any savings would accrue to the General Fund."

In an article today, Detroit News reporter Chad Livengood revealed that the state REFUSES to name the beneficiaries of the tax credits, keeping secret almost $10 billion in taxpayer handouts to companies.

Livengood writes:

"Michigan taxpayers are on the hook for giving 96 percent of nearly $9.4 billion in tax credits to companies in the vaguely named "transportation" sector, but a state agency that doles out the job-retaining incentives refuses to disclose the revised amounts owed to individual companies.

The Michigan Economic Development Corp. recently denied a Detroit News public records request seeking the names and amounts of unclaimed tax credits owed to the 10 Michigan businesses with the most credits, citing laws that shield information about individual taxpayers from public disclosure. The credits can be claimed during the next 16 years...

"Michigan is swimming against the tide of history here and claiming a tax secrecy rule that many, if not most, states have long since abandoned," said Greg LeRoy, executive director of Good Jobs First, a Washington, D.C.-based government subsidy watchdog group.

The MEDC previously disclosed records showing nearly $4.5 billion in tax credits were owed to Detroit's automakers, but it was before the agency revised its estimated total liability."

What an outrage-this is NUTS. Kudos to Chatfield for taking on this issue, and for Livengood's reporting. Stay tuned...

>>>hb4333 HERE.

>>>Rep. Chatfield Joins Choir Of Opposition Against May 5th Road Package Vote

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Brandon Hall is a lifelong political nerd from Grand Haven, and is the Managing Editor of West Michigan Politics.

Email him at WestMiPolitics@Gmail.com

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Photo By Darlene Dowling Thompson