Senate OKs business incentives for out-of-state hires

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Michigan border companies could count out-of-state hires to qualify for in-state financial incentives under re-introduced legislation on the move in the Legislature.

The state Senate on Thursday approved a bill to modify the definition of a “qualified new job” in the Michigan Strategic Fund Act, which governs rules for providing taxpayer-funded grants, loans or other economic assistance to companies that make qualified investments and create jobs here.

The new definition would include a job performed by a person who is not a resident of Michigan but is employed by a Michigan business located in a county that borders another state or country such as Indiana, Ohio, Wisconsin and Canada.

Sponsoring Sen. Dale Zorn, R-Ida Township, says the proposal could help keep border businesses in Michigan even if they cannot find qualified workers here to meet their unique demands. States like Indiana have aggressive incentives of their own to lure businesses across the border, and Zorn noted there are currently about 94,000 unfilled positions listed on the state’s jobs portal.

“Companies have to be able to find employees to fill those positions,” he told The Detroit News. “If they don’t, these companies will move out of Michigan or not come into Michigan. So this is all about creating a Michigan that’s more competitive for businesses so they can find employees with the right skill sets to do the work.”

The legislation would require a written agreement that the out-of-state individual would work on a project in Michigan, but Sen. Curtis Hertel Jr. proposed tightening the language to ensure the employee in question worked in Michigan at least 50 percent of the year. His amendment was rejected.

“The reason we give these tax credits are to make sure we’re betting on Michigan people, and those jobs should be done right here,” said Hertel, D-Meridian Township, who voted against the bill.

The measure passed the upper chamber in a 24-13 vote that blurred party lines. Two of 11 Democrats voted for it. Four of 26 Republicans voted against the bill, which has the support of the Michigan Manufacturers Association and the Michigan Economic Development Corp.

The Senate approved a similar bill late last year but the House did not vote on it last session, a delay that Zorn called “a timing issue” rather than an indication of widespread opposition.

He noted reports of Canadian nurses crossing the border for jobs in Metro Detroit.

“We have a lot of nurses that’s coming in from Canada working in Michigan because the hospitals can’t find enough nurses in Michigan, so it’s going to be benefit the medical industry as well as manufacturing,” he said.

The proposal would not increase state spending on grants or loans issued through the Michigan Business Development Program, which totals tens of millions of dollars each year. However, the Department of Talent and Economic Development could incur some additional costs to change the system for calculating a qualified new job, according to the Senate Fiscal Agency.