House speaker cancels vote on ‘good jobs’ bills
Lansing — House Speaker Tom Leonard canceled a planned vote late Tuesday night on a plan to offer tax incentives to large corporations after accusing Gov. Rick Snyder of making backroom deals with Democrats to get votes at the expense of other Republican plans.
Leonard, a Dewitt Republican, summoned reporters to announce the vote cancellation on a tax incentive plan that supporters said could have been a turning point in a battle with Wisconsin over a new Taiwanese-owned electronics manufacturing location. Leonard said Snyder made deals with Democrats to scrape together enough votes for the measure and that those deals, which he declined to specify, would “undermine Republican caucus priorities.”
“Over the past couple hours I received information that raised serious questions as to whether or not the governor cut a deal with the Democrats that would undermine Republican caucus priorities,” Leonard said. “As such, I took that information to my caucus, we discussed it as a caucus and unanimously we agreed to put the pause button on the Good Jobs legislation until the governor gets back from Europe, can look me in the eyes, can look the caucus in the eyes, and explain to them the answers to the questions we have at this point in time.”
Snyder is on a week-long trade mission to France, Germany and Italy to boost business relationships with Michigan.
The speaker heard that Snyder had agreed to veto bills “dealing with labor issues” in exchange for Democrat votes on the tax incentive package, according to a source close to House Republican leaders. The Snyder administration didn’t have enough GOP votes to pass the legislation just along party lines.
Republican leaders feared the negotiations could have included a promised veto on the teacher pension overhaul plan the Legislature approved Tuesday, even though Snyder is expected to sign that the bills he had negotiated with GOP leaders.
Another source in the House Democratic Caucus with knowledge of the negotiations between Snyder, House Minority Leader House Sam Singh, D-East Lansing, and Tax Policy Committee Chairman Rep. Jim Tedder, R-Clarkston, said Democrats only discussed amendments to the incentive legislation. They didn’t talk about a veto of the teacher retirement overhaul legislation, the source said.
Democrats simply wanted more safeguards on the tax incentive plan to make sure it turned out as intended and to ensure it had an automatic expiration date for 2019, the source said.
Nick Ciaramitaro, a lobbyist for AFSCME Council 25, said he wasn’t involved in any negotiations with the governor related to jobs package. The union has a neutral position on the bills.
“All I can tell you is that I never had any discussion with the governor or anybody in his office concerning a deal over the Business Leaders for Michigan or good jobs project,” Ciaramitaro said.
Leonard declined to offer more details about what deal the Republicans believe the Democrats may have cut with Snyder and did not say what GOP plans may have been undermined by those alleged deals.
“We believe that deals may have been cut, or that deals were cut that would undermine Republican caucus priorities,” he said.
Democrats proposed a host of amendments to the package that a House panel approved late Tuesday before Leonard’s announcement. House Minority Leader Sam Singh said Democrats had been in negotiations all day to win the support of fellow Republicans on the committee to get certain amendments approved, such as lowering a cap on annual incentives and an amendment to encourage companies that would win tax incentives to hire Michigan workers.
“We’ve been negotiating all day today trying to get to amendments that would make Democrats comfortable with getting this bill out of committee, and we were able to get those amendments added onto the committee,” Singh said, declining to go into more detail about whether any deals were made with Snyder to make the amendments happen.
Rep. Andy Schor, D-Lansing, said he is not aware of any deals related to the committee-approved amendments on the package and suggested that Leonard could be spreading unsubstantiated rumors.
“If we’re gonna stop bills based on rumors, we’re gonna see a lot more rumors,” Schor said.
he full House was set to vote on the matter late Tuesday during a marathon legislative session after a House panel kicked out the legislation during an unscheduled late hearing. The plan would grant big tax incentives to large companies and would sweeten the deal for Foxconn, which was looking at sites in Michigan and Wisconsin for a $4.2 billion liquid-crystal display screen factory that would initially employ 5,200 workers.
At first it seemed the panel might reject the plan because several members were skeptical. But Republicans garnered enough support from Democrats and Republicans to push it through committee before Leonard canceled a full House vote.
The expected vote came after President Donald Trump alluded to negotiations with an unidentified company during a visit to Milwaukee last week, according to the Associated Press, which confirmed with an anonymous source then that Foxconn is negotiating with Michigan and Wisconsin.
Bill backers say the legislation could help close the deal with Foxconn, which assembles the Apple iPhone in China. Supporters also say it would help create jobs in Michigan and the plan would only grant tax incentives to companies after they created the jobs.
The plan would allow a company to keep half of new employee income taxes if it creates at least 500 jobs paying an average regional wage. It could withhold all of its income taxes to the state if it creates at least 250 jobs paying 25 percent more than that.
The Michigan Strategic Fund could approve up to 15 projects a year, and the total value of incentive commitments could not top $200 million at any time, after a House panel amendment Tuesday night.
Sen. Jim Stamas, the Midland Republican who sponsored the legislation in the Senate, has said Michigan needs it to create new jobs at a time when companies are competing with other states with better economic incentive plans.
But detractors like Rep. Abdullah Hammoud of Dearborn said it would lead to a “race to the bottom” as more states try to compete with each other to offer the best deals to companies that set up shop. Conservative opponents like Rep. Steven Johnson of Wayland Township say it’s not the government’s business to be doling out large tax incentives in the private sector.
Gov. Rick Snyder pushed for the plan, although he has said it wasn’t a condition for his support of the Legislature’s push to overhaul the teacher retirement system, which was sent to Snyder for an expected signature Tuesday.
The House Tax Policy Committee approved a handful of amendments to the plan, including a built-in expiration date for the plan, lowering a cap on total financial obligation by the state from $250 million to $200 million and an amendment that would encourage employers to hire Michigan workers for the positions when they can.
They OK’d another amendment that could allow companies to pay workers less than the legislation would have previously required and still receive tax benefits from the state.
The Senate approved the plan in March but would have to green light amendments from the House if the lower chamber can garner enough votes to approve the measure. After that, Snyder would still have to sign off on it before it becomes law.