Great Lakes Wire

Governor Gretchen Whitmer addressed the media on Wednesday, focusing on her stance regarding corporate incentives and upcoming tariffs. During a session following her pre-K enrollment announcement, Whitmer expressed her reluctance to eliminate corporate incentives like the Michigan Economic Growth Authority (MEGA) credits against the Michigan Business Tax.

In response to a question from Detroit News reporter Beth LeBlanc, Whitmer emphasized that any policy changes should be “robustly debated” due to the commitments corporations have made based on these state incentives. "I don’t want to upend big employers who’ve made long-term commitments based on what they thought was a commitment from the state of Michigan," she stated. However, she acknowledged potential room for negotiation, saying, "I think there are probably always ways that we can make sure that our policies are smarter and achieve the goals."

The discussion arises as House Republicans consider ending MEGA credits prematurely. These credits were originally promised during the Great Recession to encourage job retention in Michigan. House Speaker Matt Hall views them as unnecessary corporate giveaways that should be funded through corporate income tax rather than directly from the General Fund.

On Wednesday, Rep. Steve Carra chaired a new House subcommittee meeting where testimony about MEGA credits was presented by the House Fiscal Agency. The credits began under Gov. John Engler in 1995 and were significantly expanded under former Gov. Jennifer Granholm during economic challenges faced by Detroit automakers.

The total liability for MEGA tax credits is $9.4 billion, with $6.4 billion already paid out and an estimated $3 billion remaining. Payments are scheduled to end in 2032, with projections indicating substantial payouts in upcoming fiscal years.

Carra’s proposal does not seek to void existing contracts but suggests raising MBT rates so companies would prefer using current Corporate Income Tax rates over claiming MEGA credits.

Additionally, Whitmer plans to lobby in Washington D.C. against impending Trump tariffs on Canada and proposed cuts to the U.S. Department of Education (DOE). She expressed concerns about their impact on Michigan's economy and education system: “We have built something to be proud of here in Michigan...but I worry that these things will set us back.” She criticized these decisions as “capricious,” noting they lack clear long-term objectives.

Whitmer warned against indiscriminate tariffs affecting allies: "If the goal is to onshore and strengthen American manufacturing, that’s a goal we can all get behind. But indiscriminate tariffs on our allies is going to put Michiganders out of work."

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