On Wednesday, Gov. Rick Snyder signed into law a tax incentive package designed to attract large companies to the state and boost job growth.
Snyder supported the legislation with an eye toward attracting one specific company: Foxconn, a Taiwanese electronics manufacturing giant looking to open a new plant in the Midwest. But that same day, the White House announced Foxconn had chosen Wisconsin, instead.
Ken Sikkema, senior policy fellow at Public Sector Consultants and a former Republican legislative leader, and Vicki Barnett, a former mayor of Farmington Hills and a former Democratic legislator, joined Stateside to break down the latest political headlines.
“The tax incentive is bigger than just Foxconn. We can talk about the irony of the Foxconn situation, but really the program was designed to lure businesses to the state of Michigan and to provide a way for them to capture taxes and hold onto those taxes,” Barnett said. “This program makes it much easier for the state to control how many dollars are on the table, and actually track them, because the system relies on the new job provider to withhold state income taxes from the wages of the higher wage jobs that it creates.”
Beyond the traditional legislature and governor-passed bills and direct ballot initiatives, Michigan has a third method to create a state law. With enough signatures added to a petition, the state legislature can approve a law without the governor’s signature.
The Associated Builders and Contractors (ABC) want to repeal Michigan’s prevailing wage law, which sets wages for workers in specific industries that contract with the state for public works projects. Snyder has said he would veto such a bill, but Republican majorities in both houses support it, leading ABC to attempt this third, unorthodox method.
“Repealing [the prevailing wage] has been on the wishlist for many years,” Sikkema said. “The stars have never really aligned for them to do it. You would think with a Republican house, senate and governor, but Gov. Snyder is opposed to repealing it, so they’re taking this other route that the constitution allows for.”
Listen to the entire conversation above.
Ken Sikkema and Vicki Barnett join Stateside every Friday to break down the week’s political news.