Legislation would end Transformational Brownfield tax capture program

LANSING, Mich., May 25, 2022 — State Rep. Yousef Rabhi (D-Ann Arbor) introduced a bill Tuesday to end the Transformational Brownfield program, which diverts a wide variety of tax payments directly into the pockets of developers. House Bill 6145 would end new Transformational Brownfield approvals as of December 2022.

“When Michiganders pay their taxes, they want it to go to the services and infrastructure we all rely on,” Rabhi said. “The Transformational Brownfield plans not only waive sales and use tax on construction materials — they also grant a 20-year concession for developers to capture the income tax from their residential tenants and their commercial tenants’ employees. This is more than a tax cut for the rich. It sets these landlords up as literal feudal lords who collect taxes from their tenants.”

Rep. Rabhi voted against the enactment of the Transformational Brownfield program in 2017. The original legislation authorized MEDC to approve up to $1 billion in Transformational Brownfield plans. In December 2021, the Legislature extended the Transformational Brownfield program for an additional $1 billion and five years, with new plan approvals ending in December 2027. HB 6145 would instead end plan approvals this year, as enacted in the original 2017 legislation.

“We need to end the Transformational Brownfield program because ceding our public taxing authority to oligarchs is not compatible with democracy,” Rabhi said. “No one should be paying taxes to billionaires.”