Biz incentives bill in limbo despite Foxconn talks

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — House Speaker Tom Leonard said Tuesday his closed-door meeting with Gov. Rick Snyder was “constructive” but didn’t promise a Wednesday vote on business incentive legislation the administration hopes will help lure a major electronics manufacturer to Michigan.

Michigan is among a small group of states competing for manufacturing facilities the Taiwan-based Foxconn plans to open in the United States. Snyder has declined to discuss details of those negotiations but said Tuesday that various job-creation opportunities “would likely disappear” without swift action on the tax incentive bill.

Leonard canceled a vote on the legislation three weeks ago amid accusations Snyder had cut a labor-related side deal with House Democrats that Republicans feared could “undermine” their own caucus priorities. The legislation is back on the House’s tentative agenda for Wednesday, its only scheduled session day in July.

Flanked by five other members of his House GOP leadership team, Leonard told reporters his first meeting with Snyder since the June blow-up went well, but he offered only a terse statement devoid of details.

“I plan to convey the information to my caucus tomorrow and we will go from there,” the DeWitt Republican said outside the governor’s office in the state Capitol. “And that’s all I’ve got for today.”

Like Leonard, Snyder called the meeting “constructive” but did not offer any details. The Republican governor declined to speculate whether House leadership will put the bill up for a vote Wednesday, saying only he “hopes” for a vote after Republicans meet to discuss the bills in the morning.

“I think there are companies out there that are making decisions this summertime,” the governor told reporters, “a July-August kind of timeframe, and it’s important that we potentially have this as a tool in our toolkit to help bring some job opportunities to Michigan.”

The legislation would allow qualifying businesses to capture some or all of the state income taxes paid by new employees if they successfully create hundreds of jobs that pay at or above average regional wages.

The proposal passed the Senate with bipartisan support in late March but has faced opposition from state House conservatives who favor lower overall taxes rather than carve-out incentives for individual companies, which some derisively call “corporate welfare.”

Snyder did not deny he has also negotiated with Democrats as he seeks to secure enough votes for the legislation. But when asked if he had promised a freeze on union-related bills, he refused to discuss specifics.

“I’d love to see this be bipartisan, so we’re talking to people on both sides of the aisle, trying to get people to understand the benefits of this bill and how it’s good for Michiganders,” he said.

Snyder aides met later Tuesday with Democratic Reps. Sherry Gay-Dagnogo and Fred Durhal Jr., who lead the Detroit Caucus. Gay-Dagnogo said the caucus is “working towards solutions” to help out-of-work residents across the state find and secure jobs like the ones the incentive bill could create.

Among other ideas, they mentioned “ban the box” legislation introduced last term by Durhal that would prohibit employers from asking about felony convictions on job applications.

“We’re looking for the governor’s team to come up with some strategies and to discuss them with (Republicans),” Gay-Dagnogo said. “It could be a myriad of ways to ensure adequate training, job placement, transportation and providing child care.”

While talks are ongoing, Gay-Dagnogo said she thinks there will ultimately be a Wednesday House floor vote.

“I am certainly looking for a way to be supportive of attracting a company that could provide 5,000 jobs,” she told reporters.

Wisconsin and other states are also reportedly vying for Foxconn investments.

If he chooses to use it, Snyder has some leverage as he lobbies for the incentive legislation. He has not yet signed a major teacher pension reform bill championed by House and Senate Republicans.

The governor has until Thursday to sign or veto the pension legislation. Asked if he was holding it over the heads of Republicans, Snyder said he tries to look at each piece of legislation on its own merits. Snyder met with Leonard and other House Republican leaders Tuesday morning.

The business incentive legislation advanced out of the House Tax Policy Committee last month after a series of amendments limiting the scope and scale of the plan approved by the Senate.

The revised proposal would cap the total value of the program at $200 million, as opposed to $250 million, and allow up to 15 agreements at any one time. It would prohibit the state from entering into any new incentive agreements past the end of 2019, a sunset that would require the legislature to revisit the program in two years or allow it to end.

The legislation would allow a company that creates up to 3,000 jobs with pay that matches the average regional wage, or 250 jobs at 125 percent of the regional wage, to keep all income taxes their employees would otherwise pay the state for up to 10 years.

Companies that create 500 new jobs paying an average wage could keep 50 percent of employee income taxes for up to five years.