Michigan passed a new bill Wednesday that will provide major new tax incentives for business that create good paying jobs in the state.
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The so-called “Good Jobs” program aims to encourage companies to create high-quality positions by offering incentives to businesses that create anywhere from 250 to 3,000 jobs that pay at least the average regional wage. Incentives are capped at $200 million per year.
The bill passed the State Legislature with bipartisan support Wednesday, the only day this month state lawmakers are expected be in session.
Gov. Rick Snyder (R-Mich.) has been pushing the Legislature to approve the "Good Jobs" program this summer, hoping it will help persuade Taiwanese electronics contractor Foxconn to build a 5,000-employee display panel factory in the state. A decision is expected by early August, but as many as six other states may be in the hunt for the factory or other Foxconn projects.
Advocates contend that the new incentives are structured better than those Michigan used to offer and will help it compete with other states to land new, good-paying jobs. Critics argue that they amount to "crony capitalism" and come at the expense of individual taxpayers who also deserve breaks.
The legislation passed 71-35 in the House, with 40 Republicans and 31 Democrats voting in favor and 22 Republicans — include House Speaker Tom Leonard — and 13 Democrats voting against it. The Senate, which approved the legislation in March, sent it to Snyder on 29-5 and 30-4 votes.
Businesses can qualify for the incentives in one of three ways:
— Creating 3,000 or more jobs that pay at least the average regional wage. They can keep all of the employees' income tax withholdings for 10 years.
— Creating at least 500 jobs that pay the average regional wage or more. They can keep half of the income taxes for five years.
— Creating 250 or more jobs that pay at least a quarter more than the average regional wage. They can keep all of the income taxes for 10 years.
The Michigan Strategic Fund can strike up to 15 deals a year. No more than $200 million in incentives will be awarded — a provision that backers say distinguishes the program from the Michigan Economic Growth Authority program. It was uncapped and also aided automakers and other companies that kept existing jobs in the state especially in the Great Recession.
Retail stores, pro sports stadiums and casinos will not qualify for the new tax breaks. Legislators will have to reauthorize the program if they want it to extend beyond 2019.
The Associated Press contributed to this report.