Michigan lawmakers have a chance to do some productive work when they return to the Capitol today for a one-day housekeeping session. They should pass Gov. Rick Snyder’s Good Jobs bill and go back to their summer vacations content they’ve placed Michigan in a more competitive position to attract jobs and investment.
The bill, which has already passed the Senate, stalled in the House at the end of the session last month on concerns by the Republican leadership that Snyder had promised too much to get the Democratic votes necessary for passage.
Tuesday, the governor met with House Speaker Tom Leonard and key committee chairs and appears to have reached an agreement to bring the bill to the floor for a vote today.
Now the challenge is lining up enough “ayes” to push it through.
A bloc of Republican representatives still oppose the measure to provide tax incentives to major development projects considering Michigan. Backers believe they’ll need at least a dozen Democratic votes to push it across the 55-vote threshold.
We respect the sentiment of the opposition. Tax incentives have a spotty track record in Michigan, rarely delivering the jobs promised when the breaks were approved.
And we agree that the best approach is a tax policy that creates a favorable climate for all businesses.
But Michigan has already taken that step, putting in place reforms early in Snyder’s tenure to rationalize the tax code.
Yet the state is still losing out on big investments to neighboring states that are willing to sweeten their offers with tax incentives.
Currently, Michigan is competing with other Midwest states for the 5,000 jobs being dangled by Taiwanese tech giant Foxconn, which does assembly work for Apple. This would be a huge get for the state. But the company is unlikely to come here unless the state can put together a favorable tax package.
No one likes to be held hostage like that, but it is today’s reality.
The Good Jobs bill is crafted to keep it from becoming an open-ended corporate welfare program.
Companies promising at least 500 jobs that pay the average wage of the region would be reimbursed for 50 percent of the income taxes paid by the new workers for five years. Businesses that create at least 250 jobs paying 125 percent of the average wage could be reimbursed for 100 percent of their new employees’ income taxes for 10 years.
If the jobs don’t materialize, neither will the tax capture.
The incentive would only be offered if the Michigan Strategic Funds deems them necessary to level the field with another state.
If enacted, the program should help Michigan get into the final round in negotiations for big developments, something that is not routinely happening today.
Lots of things go into a site selection decision, including taxes, certainly, but also the quality of the workforce and the condition of the local infrastructure. Michigan isn’t where it needs to be in some of those other areas.
The Good Jobs incentives could make up for those shortfalls.