LANSING – Credits given for brownfield redevelopment, job growth and research and development are essential to boosting Michigan’s economy and allowing communities to reinvent themselves, officials from the Michigan Municipal League and Michigan Manufacturers Association said Wednesday as they urged legislators not to support reductions to the credits.

The testimony was the second before the House Tax Policy Committee on various credits awarded under the Michigan Business Tax.

The House already has passed legislation reducing some of the credits, but that bill (HB 5384 ) has not been taken up by the Senate.

Many developers rely on the brownfield credits to get significant equity in the property they are developing and leverage that with the bank, said Andy Schor of the municipal league. In exchange, municipalities get redeveloped properties that better their community and put people to work, he said.

Schor ticked off a series of projects he said would not have been considered save the brownfield credits being available: $280 million in credits for Detroit that brought $6 billion in investment and 13,000 jobs, $11.9 million in credits for Kalamazoo that brought $177 million in private investment and 1,400 jobs and 22 projects in Monroe that brought 320 jobs to the city.

Officials from General Motors and the manufacturers association also told lawmakers the MBT credits for investment, compensation of employees and research and development are critical as companies base their costs on global competition.

Mike Johnston, vice president of government affairs for the manufacturers, said the credits are there to both overcome the disproportional amount of taxes his members pay, particularly on the personal property tax and gross receipts portion of the MBT, as well as attract what policymakers want most: investment, jobs and research and development.

“A reduction in credits is a direct tax increase on Michigan’s home teams,” he said. “Ultimately, you need a tax system that creates jobs.”

But as Johnston talked about the need to further reduce the state’s tax burden, several lawmakers countered taxes are only one of the factors company’s look at when deciding where to do business.

Rep. Andy Coulouris (D-Saginaw) said if taxes are in the top five list, then the remaining four areas are things that tax dollars fund like education and safe communities.

And Rep. Tim Melton (D-Auburn Hills) countered Johnston’s remarks by saying manufacturers are faring better under the MBT than they were under the Single Business Tax.

Johnston said the state may be in the middle of the pack in terms of business tax burden, but manufacturers historically and now have a greater share of that burden when compared to the national average for the sector.

AUTO DONATION: The committee did unanimously report legislation that would eliminate the sunset on the income tax credit for automobile donations to charitable organizations.

Officials from the Goodwill Association of Michigan testified in support of the legislation, saying they work to help people struggling to meet their transportation needs and the credit is an incentive.

Individuals receive a $50 tax credit for their donations, while people owning a car jointly receive a $100 credit.

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