Business

Michigan Lawmakers Open New Fronts In Fight Against Corporate Welfare

Daily Caller News Foundation logo
Peter Fricke Contributor
Font Size:

As a bill to repeal Michigan’s film incentives moves forward, some lawmakers in the state legislature are now suggesting that the state renege on existing business subsidies, as well.

Michigan Live reported Monday that, “A bill that would put a stop to the state’s film incentive program made it out of a House committee last week,” but could face an uphill battle in the Senate should it pass in the lower chamber. (RELATED: Michigan Lawmakers Consider Repealing Business Subsidies)

Michigan started giving out film incentives in 2008, and the article claims those incentives are credited with “[supporting] the filming of big-ticket movies like Batman vs. Superman in Michigan.”

The sponsor of the repeal bill, Republican Rep. Dan Lauwers, told Michigan Live that it “makes no sense” to keep this $50 million expenditure in the budget when the state is facing a budget shortfall.

Republican Senate Majority Leader Arlan Meekhof, however, expressed displeasure with the House bill, which was not discussed with Senate leaders, saying, “Now they’ve made some confrontation and it makes it very difficult [to pass the bill].”

“Setting the film industry part of it aside, this is a contract and promises we made to folks that grow this industry here, and now they want to end it without it being matured,” Meekhof added. “We still support the car industry with different incentives, so I think this is rather short-sighted.”

Now, though, The Detroit News reports that, “Lawmakers on both sides of the aisle have suggested that companies” — including the automakers — “should be willing to forgo owed tax credits.” (RELATED: McAuliffe Sets Record for Business Incentive Deals)

The tax credits in question were issued through the Michigan Economic Growth Authority, which was created in the final years of Democratic Gov. Jennifer Granholm’s administration to encourage businesses to create and retain jobs in the state. But with increasing pressure to balance the budget, lawmakers are now beginning to balk at the cost.

“For the 2016 fiscal year, business tax credits are expected to cost more than $800 million,” the article claims, and the total cost of fulfilling the state’s remaining commitments is estimated at a staggering $9.38 billion over the next 16 years (when the last of the deals expire).

Democratic state Rep. Brandon Dillon, who supports the idea, argued that, “Everybody who has an interest in the state’s fiscal health should be willing to make some concessions just like state employees have done … in the last decade.”

“There’s almost $10 billion in credits out there,” Dillon said. “To suggest that … the value can’t somehow be reduced in a very, very modest way to help ease the pressure on the budget, I think is ridiculous.” (RELATED: NC Conservatives Resist Gov. McCrory’s Request for Business Incentives)

The most expensive tax credits, with an initial combined value of over $4 billion, were awarded in 2009 and 2010 to the “big three” automakers (General Motors, Ford, and Chrysler), but because the credits are based on wages, their cost has gone up in recent years “because of a profit-driven rise in payrolls” at the automakers.

“We don’t even know how big this could get because there are factors the government can’t predict,” said Republican state Rep. Cindy Gamrat, adding that lowering the payments made to businesses under the program is “the responsible thing to do.”

Not all legislators share that view, though, with some believing that Michigan should live up to its contractual obligations to avoid losing credibility with future partners.

“It’s inconvenient now that the credits are being submitted,” said Republican state Rep. Earl Poleski, but “they are contractual in nature, and to renege on a contract would be to call our integrity into question. I’d prefer not to see that happen.”

Follow Peter Fricke on Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Tags : michigan
Peter Fricke

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel