More from Taxpayers, But State Corporate Welfare Taking More Too

Income tax collections outpacing most recent projections

Michigan residents are making more money, meaning more money for state government. But its financial health is still enduring the effects of corporate welfare deals cut during the administration of former Gov. Jennifer Granholm.

The state is projecting it will take in $9.2 billion in net income tax by the end of the 2015-16 fiscal year, which would be a net 2.5 percent increase from the previous year. But the state also projects that it will have to pay out $1 billion in corporate welfare in the form of Michigan Business Tax credits by the end of the year. Overall, the state of Michigan’s revenues are projected to increase 2 percent to $22.1 billion in 2015-16.

The Michigan Economic Development Corporation doesn’t release the names of companies that received the money from the tax credits, despite a state law mandating that disclosure. State legislators eliminated the business tax in 2011 and replaced it with a corporate income tax and a separate financial institutions tax.

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But many corporations are still collecting on their deals made under the now-defunct tax.

“The costs of deals made years ago is hitting the state budget hard,” said James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy. “Residents ought to be outraged that they have to foot this bill while not being told exactly who is getting them and how much they are receiving.”


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