ROCHESTER HILLS - On an industrial property in Oakland County, Gov. Rick Snyder on July 26 inked a three-bill package into law designed to diversify Michigan’s economy and attract new, large-scale employers. It's a package supported by a bipartisan group of legislators from across the state, along with economic development partners from every region and representatives of organized labor.
“The resurgence of Michigan as a manufacturing powerhouse is clear. We are prouder than ever of our thriving economy, our talented workforce and our low unemployment rate,” Snyder said. “But we will not be complacent, as we were during the Lost Decade. Michigan needs to set the stage to grow entirely new industries and continue to diversify our economy. By now we know the realities of today’s economic environment and will do everything we can to remain the most competitive state for business and show the rest of the nation and the world that Michigan is the best place to create new jobs.”
The "Good Jobs" package of Senate Bills 242-244, sponsored by Sens. Jim Stamas, Wayne Schmidt and Steve Bieda, respectively, is expected to entice new and emerging businesses with sizable workforces, by allowing them to keep some or all of the state income tax paid by their employees if certain criteria are met. The incentives vary in amount and length of time according to the number of new jobs the qualifying businesses creates, and whether or not it can meet or exceed regional average wage requirements.
To qualify, prospective employer/applicants must create at least 250 new jobs, and pay salaries that are 125 percent or more of the prosperity region average wage. Businesses that meet the 500 or 3,000 (or more) job thresholds must pay wages at least equal to 100 percent of the prosperity region average wage. Qualifying 3,000 or more job and wage applicants are eligible to receive the maximum income tax capture for 10 years, the maximum length of time allowed under the legislation.
"This is a tremendous bill, designed to entice investors of large developments to come to our state," said Michigan Building and Construction Trades Council Legislative Director Patrick "Shorty" Gleason. "One big benefit is that the law sets up a wage standard similar to prevailing wage for these developers, and that's going to be a big benefit to the state's construction workers."
According to Snyder's office, the new law also:
*Preserves the integrity of a performance-based incentive program - if an authorized business fails to satisfy and maintain the minimum number of new jobs, it would forfeit its withholding tax capture for that year;
*Requires transparency reporting to the state legislature, detailing employer information, along with the amount and duration of each tax capture;
*Caps the number of employer agreements at 15, which could roll over to future years if unused, and limits tax capture revenues to $200 million over the life of the program.
The bills were supported by a majority of Republicans and Democrats in both the state House and Senate.