|State Rep. Lee Chatfield testifies in Lansing today.|
By Brandon Hall
(Email him at WestMiPolitics@Gmail.com)
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.
"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...
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
|Photo By Darlene Dowling Thompson|