LANSING – Republican lawmakers introduced bills on Wednesday that would prohibit the amendment of tax credits originating under the now-defunct Michigan Economic Growth Authority, which have accumulated a $9.4 billion liability in the state and caused a budget shortfall in the current fiscal year.
Rep. Lee Chatfield (R-Levering) and Rep. Gary Glenn (R-Midland) introduced HB 4333 and HB 4334 , respectively. Both bills were referred to the House Tax Policy Committee and have the committee’s chair, Rep. Jeff Farrington (R-Utica) as a co-sponsor.
The first bill prohibits MEGA tax credit extensions as currently allowed in the Michigan Economic Growth Authority Act and the second bill prohibits MEGA tax credit extensions as currently allowed in the Michigan Business Tax Act.
“No governor should be allowed to extend or increase these tax credits, not next year and not 15 years from now,” Chatfield said. “Although the current governor has no intention of extending these harmful tax credits, the reality is that a less fiscally responsible administration could come into office and put our state in greater financial jeopardy. We simply can’t allow that to happen – the stakes are too high. It’s up to us to make sure the mess created during the lost decade is cleaned up not only for current Michigan taxpayers, but for future generations.”
The state will be paying the tax credits until 2031, officials have said. Under Governor Rick Snyder’s administration, officials have also said they will no longer be making any amendments to the credits.
“The fact that the tax credits are being claimed by employers who upheld their contractual obligation to create or retain jobs is, on the one hand, good news for our economy and working families,” Glenn said in a statement. “Those employers aren’t at fault; they did what they agreed to do. The question is, was it a good policy in the first place, and certainly we must change the lack of transparency from the Department of Treasury about the supposedly unpredictable timing of the existing credits’ impact on our state budget, plus take steps now to ensure that taxpayers’ current $9 billion financial liability, and the length of that liability, is not increased even further.”
