House OK's state tax incentives for firms hiring out-of-state workers

Beth LeBlanc
The Detroit News
The Michigan Legislature is considering legislation that would allow more companies receiving state tax incentives to hire out-of-state workers.

Lansing — The Michigan House narrowly approved legislation Thursday allowing some companies receiving state tax incentives to hire workers from out of the state, setting off accusations it would subsidize job theft.

The legislation, approved in a 56-53 vote, would change the definition of a “qualified new job” in the Michigan Strategic Fund Act, which governs rules for taxpayer-funded aid to companies that invest and create jobs in Michigan.

Seven Republicans voted against the bill, including Rep. Tom Barrett of Potterville, Rep. Diana Farrington of Utica, Rep. Michele Hoitenga of Manton, Rep. Pamela Hornberger of Chesterfield Township, Rep. Martin Howrylak of Troy, Rep. Steven Johnson of Wayland, and Rep. John Reilly of Oakland Township. All of the Democrats also voted against it.

First introduced in early 2017 by Rep. Dale Zorn, R-Ida, the Senate legislation initially applied to companies located in border counties. But the House-approved bill changed the language to allow companies whose work forces include at least 75 percent in-state workers to hire from outside of Michigan.

Companies would certify that 75 percent in-state employee majority in writing, according to the bill. The legislation is headed to the Senate for possible final approvals.

The legislation would allow “workers from out of the state to come in and take new jobs from Michigan workers from funds that were created in order to give an incentive for employers to hire Michigan workers,” said Rep. Donna Lasinski, D-Scio Township.

“It is absolutely unconscionable to transfer our state tax dollars to out-of-state workers,” Lasinski said.

But GOP Rep. Aaron Miller argued the bill came down to “fairness issues” for areas near the state’s border, such as Miller’s hometown of Sturgis near the Indiana border, where workers don’t see state lines.

“We have thousands of individuals from Michigan who work in Indiana; we have thousands of Indiana individuals who happen to work in Michigan,” Miller said, noting he doesn't support “corporate welfare in general.”

The legislation is expected to draw workers from border states or a border country such as Indiana, Ohio, Wisconsin and Canada.

A House analysis of the bill found that out-of-state companies looking to start a second location in Michigan might hesitate to do so without the ability to bring some existing workers along. It may explain the amended language that applied the change from solely companies in border counties to those with a majority of in-state workers.

The House Fiscal Agency's analysis of the bill at the end of 2017 found the change is unlikely to cost more since it wouldn’t necessarily expand the given appropriation for the incentive program.

(517) 371-3661