Good Jobs is Good News for Michigan

Good Jobs for Michigan was a package of bills first introduced in 2016 that would provide an incentive tool for economic developers across the state to use in the business attraction game. Unfortunately, the bills originally died in the lame duck session, which meant they would need to be reintroduced in the new session beginning in January of 2017. Basically, back to square one.

But the coalition working on these bills, which the Lake Superior Community Partnership is part of, quickly went back to work to make it happen. In late spring, the Senate passed the three-bill package and the Gov. Rick Snyder indicated he would sign them if they reached his desk. That meant the last piece of the puzzle was approval by the House of Representatives.

While that didn’t happen before they adjourned for spring break, they were called back to Lansing last Wednesday to take up the bills. Through a lot of hard work by many, including our U.P. legislators, they passed and are on their way to the governor’s desk. Whew! We now have another incentive tool when that perfect project comes knocking.

So what does this new incentive do? The Good Jobs for Michigan legislation provides an incentive in the form of a return of state personal income taxes for companies that create 500 or 250 new jobs in Michigan. Business expansions or new locations that create at least 500 new full-time jobs and pay 100 percent or more of the average wage in the State of Michigan Prosperity Region would be eligible to capture up to 50 percent of the personal income tax withholdings of the new employees for up to five years; and Business expansions or new locations that create at least 250 new full-time jobs and pay 125 percent or more of the average wage in the State of Michigan Prosperity Region would be eligible to capture up to 100 percent of the personal income tax withholdings of the new employees for up to 10 years.

Retail establishments, professional sports stadiums and casinos are not eligible.

Basically, this supports the need for family sustaining wage jobs. The wage thresholds are performance-based, meaning that unless the job numbers and wage requirements are met, no incentive is paid to the company. For example, the average wage in Region 1 (the Upper Peninsula) is $19.09. New jobs under this program would need to come in between $19.09 and $23.86! Companies taking advantage of the program also agree to have their names and the value of their incentive publicly disclosed to provide for the appropriate transparency with the use of taxpayer dollars.

Lastly, it is predictable for budgeting purposes to maintain control of the total amount being incentivized. There is a cap of 15 projects per year. There can be no more than $250 million in total incentives outstanding at any one time and the incentives do not favor one industry over another. Instead, focus is put on large-scale projects that will benefit Michigan.

For more rural areas like ours, where large scale attraction projects don’t come around often, so you may wonder why we have been supportive of these bills. No matter where a large scale project lands in Michigan, it is good for the state. New companies may become customers or suppliers of the many wonderful businesses in the U.P. New employees and their families may explore our region on vacation. The additional exposure to Michigan with successful attraction projects will breed more successful projects in the future.

Good jobs is good news for Michigan.

Amy Clickner, CEO, writes a bi-weekly column for the Mining Journal.