Michigan Votes Forum

Introduced in the Senate on November 4, 2003, to extend the Dec. 31, 2003 sunset of the Michigan Economic Growth Authority (MEGA) until Dec. 31, 2009, and expand the types of firms MEGA could grant benefits to. MEGA is authorized to grant tax credits to companies that promise (but are not required to guarantee) to create or retain a certain number of jobs. The bill would add a provision requiring the governor to appoint to the current eight-member MEGA board two members nominated by the Senate Majority Leader and the Speaker of the House, and essentially give these nominees veto power by requiring them to be in the majority of any actions taken by the board. The bill would also require that gubernatorial appointments to MEGA be subject to the advice and consent of the Senate. MEGA beneficiary firms would be required to make a good-faith effort to use Michigan-based suppliers and vendors when purchasing goods and services, and to disclose to the state the names of corporate officers, board members, and partners. Also under the bill, responses to Freedom of Information Act (FOIA) requests would require approval of the full board, rather than just the director. However the board only meets monthly, and FOIA requires requests to be responded to within five days. Financial or proprietary information about MEGA beneficiary companies is exempt from disclosure under FOIA. The bill would eliminate MEGA's power to impose administrative rules on participating businesses, and contains language authorizing tax breaks targeted at a facility in Greenville owned by the ElectroLux company which employs 2,000 workers and is scheduled to close

The vote was 38 in favor, 0 opposed and 0 not voting

(Senate Roll Call 554 at Senate Journal 96)

Click here to view bill details.

Senator Sikkema's statement is as follows:

I just wanted to make some comments on the passage of this package of bills, Senate Bill Nos. 820, 821, 822, and 824. I really think this package of bills is a vital component of our efforts here in Michigan to encourage private investment and job creation. I think Section 2 of the Michigan Economic Growth Authority Act that is in front of us right now probably says it all. Section 2 is the legislative finding section, and it says very clearly, and I quote, "The legislature finds that it is in the public interest to promote economic growth and to encourage private investment, job creation, and job upgrading for residents in this state." That says it all.

MEGA, which has been under joint review by the Senate Committee on Commerce and Labor and the Appropriations subcommittee, jointly chaired by Senator Allen and Senator Valde Garcia, after four hearings has documented that MEGA has served us well. It is one of the tools in the tool box of what we need to create jobs in this state and to make Michigan an attractive place for job growth and job creation. But they also documented that we need to make some adjustments to MEGA because we have to respond to the times we are in.

The legislation in front of us provides some more flexibility in the area of high-tech sector than MEGA currently does. There's some language that could prove vital to this state in terms of Electrolux in west Michigan and Allied Automotive down in southeast Michigan. We've added some language so that businesses in the rural areas of Michigan and in northern Michigan and the Upper Peninsula could qualify for MEGA grants. We've added some language to ensure more accountability of fuller public disclosure of information, more openness, and we've made some changes that ensure more bipartisanship in the issue of the MEGA board. All of those are good changes. They build on the success that MEGA has had in the last few years.

Let me just close by saying there's a lot of attention, appropriately so, on the budget deficit in this state. But we also need to focus like a laser beam on the issue of job creation. The $900 million deficit is a significant statistic, but even more significant is the fact that in the last 21 months Michigan, with 4 percent of the nation's workforce, has lost 23 percent of the nation's jobs. The deficit we face today is a jobs lost deficit, and we have to do everything we can to make this state an attractive state for business investment and job creation. The passage of this package of bills today is the second plank in the Republican plank to do just that.

Senator Schauer's statement is as follows:

I agree with many things that the Senate Majority Leader said, that the extension of the MEGA single business tax credit sunset is desperately needed at this time. We've lost 170,000 manufacturing jobs in Michigan in the last three years. Michigan's unemployment rate continues to be 7.4 percent when the national unemployment rate has just dipped to 6 percent. Michigan is not just experiencing a jobless recovery; we're experiencing a job loss recovery.

Those who testified for these bills--and we heard hours of testimony in the Commerce and Labor Committee, in the Joint Select Committee on Business Competitiveness--and we did hear a call from those industries and from the Michigan Economic Development Corporation for some changes. Senator Kuipers and I offered an amendment in committee to make a minor change for high-tech MEGAs, which with the Technology Tri-Corridor that Governor Granholm is supporting, is needed to help us support high-tech ventures in our state, to help support Electrolux in Greenville, and to help support the Ford Automotive Alliance in Flat Rock. Those were called for by industry and by the MEDC as improvements, along with the extension of the sunset. But as far as the Legislature recommending additional appointments to the MEGA board, that does raise a serious separation of powers issue that I am concerned about. Along with giving those appointees special automatic executive committee status, it subjects the entire MEGA board to Senate advise and consent. That separation of powers concern is something we should take seriously, and I hope the House fixes it, along with the deletion of rule promulgation authority.

My previous amendment was not trying to provide something new but just maintain in law something that's already there and something that Governor John Engler in 2000 said was important, that these state departments and quasi-public organizations like the MEDC had. So I do have some reservations. I think we are moving the process along in an important way. I hope the House addresses some of these concerns of some of the problems that exist in the bill.

Our legislators seem to think that government is the solution to our economic and societal problems.

I challenge each to ask themselves...Where would Michigan be without government that has unlimited power over its citizens with its intrusive regulations and taxes required to fund them?

Where would our nation be?

Despite the very articulate response by Senator Schauer, he (and judging by the rest of the recent vote, the rest of the Michigan Senate) still fails to grasp the inherent problem with programs such as these: It is not a function of government to, in effect, assume a role of central planners in Michigan’s economy.

This bill is putting Michigan on a slippery slope, which according to history will only ruin the state’s economy in the long term.

This bill should be voted down when it comes back from the House for final ratification, the agencies covered under this bill should be closed and their budgets returned to the General Fund so that they cannot be used to implement another similar program.

Win! Win! Win! Sign up for your MEGA credit here. Get rich!

If you are a corporation wanting to expand in Michigan, you may already be a winner!

Just fill out forms showing that you might have gone to another state, and MEDC will make sure you get MEGA tax credits and property tax abatements. Just pretend that the MEDC is responsible for bringing or keeping you here, and the endless wallets of Michigan taxpayers can be yours!!!

You can promise new jobs and not deliver! KMart and Aspen Bay did. We don't care -- it's not like it's our $37,000,000! We only take little amounts from all Michigan taxpayers, and they never notice!

But hurry and sign up today. We were going to expire, but now we are only wasting, er, investing in companies through 2009. Get yours now before it's all gone.

A lot of good programs such as this one did for the soon-to-be former AB Electrolux employees.

Government should NOT be in the business of picking the winners and losers in the private sector.

This program should be abolished and the monies already budgeted towards it rolled back into the general fund where they can do more good.