House Dems: Reconsider Budget-Busting MEDC Tax Credits

Families shouldn’t pay for looming deficit caused by corporate tax breaks
Tuesday, February 10, 2015

LANSING – With the state facing a deficit and the governor contemplating program cuts, the Michigan House Democrats are demanding a budget that requires big corporations to come back to the table and pay their fair share, instead of yet another budget that forces Michigan families and students to make sacrifices.

“Gov. Rick Snyder and legislative Republicans have made giving handouts to big corporations their priority for the past four years, and now we have a looming deficit to show for it,” House Democratic Leader Tim Greimel (D-Auburn Hills) said. “This deficit was caused by runaway corporate incentives through the Michigan Economic Development Corp. and unprecedented tax breaks for big corporations, without any requirement that those tax breaks lead to job creation. All parties need to come back to the table and start by reconsidering these budget-busting tax breaks for handpicked corporations.”

It’s widely anticipated that Gov. Rick Snyder will announce budget cuts this week that threaten to limit services Michigan citizens rely on. Additionally, it’s anticipated that the governor and legislative Republicans will propose raiding money in the School Aid Fund that should go toward educating Michigan children.

“Michigan has dug itself into a hole by giving corporations tax breaks hand-over-fist,” said Rep. Brandon Dillon (D-Grand Rapids), a member of the House Appropriations Committee. “We need to close the deficit by fixing the problem of rampant corporate tax breaks. Otherwise, we’ll find ourselves in the same situation again down the road.”

Regular working families and students have been forced to sacrifice for the corporate handouts through an increased tax burden and crippling cuts to public school funding. Since 2011, Republicans have reduced taxes on big corporations by more than $1.7 billion, while increasing the tax burden on families and seniors. At the same time, legislative Republicans slashed per-pupil school funding.

“Michigan families and students have already made too many sacrifices to pay for sweetheart tax credits for a small group of already profitable businesses,” said Rep. Jon Hoadley (D-Kalamazoo), a House Appropriations Committee member. “The School Aid Fund should be invested in our schools, not used to patch holes caused by business tax cuts.”

Rather than punishing working families for tax and economic development policies that didn’t work, House Democrats demand the MEDC be held accountable for the incentives it gives corporations, and for big corporations to pay their fair share.

“For too long, I’ve seen state resources pay for corporate handouts that haven’t created jobs rather than invested in communities, where they would benefit families and schools,” House Appropriations Committee member Sarah Roberts (D-St. Clair Shores) said. “Those funds need to be returned to the taxpayers who paid them in the form of programs and community investments that benefit everyone.”

“Michigan families have been asked to shoulder the burden of balancing the state budget for the last four years. It’s unreasonable to put to further strain on their household budgets,” House Democratic Floor Leader Sam Singh (D-East Lansing) said. “We need a tax structure that helps build a stronger Michigan and allows us to invest in critical areas. Part of our current budget troubles stem from handouts and tax breaks for big corporations. It’s time to reevaluate the effectiveness of these handouts and weigh them against the best interests of the state as a whole.”