- Associated Press - Thursday, May 7, 2015

LANSING, Mich. (AP) - The tax credit program that unexpectedly brought on $9.4 billion in potential liability for Michigan would be limited under two bills approved nearly unanimously Thursday by the Republican-led House.

Business groups including the Michigan Manufacturers Association and the Detroit Regional Chamber of Commerce had opposed the measures, which would prevent the Michigan Economic Growth Authority from entering into new agreements allowing tax credits for businesses. It would also be prohibited from changing existing agreements unless the change results in a reduction of the amount of the credit.

Officials said in February that Michigan is potentially on the hook for $9.4 billion in business tax credits over the next two decades.

Republican Gov. Rick Snyder and the Republican-led Legislature were forced to cut the budget mid-year as a result.

Rep. Lee Chatfield, a Republican from Levering and one of the bill sponsors, said in a speech on the House floor that the bills are simply about limiting liability for the state.

The bills are not about harming existing deals, he said.

“I consider it important for the state of Michigan to prove to the rest of the country that we are a good state for business,” he said.

That statement was echoed by Rep. Gary Glenn, a Republican from Midland and sponsor of the other bill in the package.

The statements from the bill sponsors appeared directed at concerns from business groups who said the legislation would hurt the state’s ability to attract jobs.

Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association, made a statement to that effect while speaking against the bills in a House committee hearing last month.

The bills would announce to the world that Michigan is “unilaterally disarming” when it comes to attracting jobs, he said.

Tax Policy Committee Chair Jeff Farrington took issue with that statement, calling it false.

“To make statements like that is inflammatory,” Farrington said, adding that comments like Johnston’s are “exactly what other states want to hear.”

The Michigan Manufacturers Association represents businesses including the Big Three automakers, which received tax credits that the association says helped keep the auto industry in the state during the Great Recession.


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