Representatives Express Concerns With AK Steel Agreement

Transparency lacking in negotiations
Thursday, March 16, 2017

LANSING — A group of bipartisan state representatives spoke out against MEDC negotiations concerning brownfield tax credits for AK Steel’s Dearborn Works steel plant. State Reps. Stephanie Chang (D-Detroit), Abdullah Hammoud (D-Dearborn), Pete Lucido (R-Shelby Township) and Martin Howrylak (R-Troy) said by going around the legislature, the company may avoid answering questions about environmental protections for surrounding neighborhoods. Last session, House Bills 5557 and 5558 would have allowed AK Steel to claim MEGA tax credits that were awarded to the previous operator of the facility, but those bills did not receive a vote on the House floor. The MEDC is now considering awarding both MEGA and brownfield credits without legislative approval.

“Michigan residents and the residents of House District 6 deserve transparency and a public process in which they can engage, ask questions, and share concerns, especially when it comes to giving away their taxpayer dollars to a corporation that is one of the known polluters in the area,” said Rep. Chang. “It is deeply troubling to me that MEDC is developing an agreement with AK Steel to transfer millions of Severstal’s old tax credit dollars through a closed door process after the AK Steel bills died in the Legislature last year. Even more maddening is the fact that HD 6 residents, who breathe in air pollution every single day, do not know if this tax break comes with the environmental equipment upgrades or accountability that we demanded be included in legislation last session. My residents, and all Michiganders, deserve better than this.”

“Our government should not be able to pick winners and losers,” said Rep. Howrylak. “This backdoor agreement sets a dangerous precedent by allowing a specific company to acquire a tax loophole without going through the legislative process to amend the Tax Code. In fact, it effectively awards a brand new MEGA credit to a company that never received one, even though the MEGA program no longer exists.”

“The timing is ironic, as today the Michigan House voted on a package of bills to increase government transparency and accountability,” said Hammoud. “This tax credit situation is a prime example of something this legislation would address. I understand that AK Steel has made positive strides compared to the previous owner, both in their community efforts and with actions to address emissions. That being said, residents of Dearborn have real concerns about air quality and the detrimental impact it has on public health and the environment. I am severely disappointed that we were prevented from working to address the concerns of residents. Unfortunately, this term we weren’t given the chance, as elected representatives of our communities, to publicly discuss or work on this issue legislatively.”

 AK Steel acquired the Dearborn Works plant from Severstal North America, and wanted to use unused MEGA credits and Brownfield credits that had been awarded to Severstal Dearborn Works.

“We should be looking at ways to bring as many new job providers to Michigan as possible, but we should do so in an open process” said Rep. Lucido. “When I came to Lansing I said I wanted to do a job, not just get a job, and I am ready to do my job to review this request and cast my vote. The people elected us to engage in this process, not to hand it over to unelected bureaucrats.”