good jobs package

Sen. Jim Stamas, R-Midland, (second from right) speaks in favor of a bill package that would let some companies create jobs and keep a portion of the withholding tax from new employees.

(Emily Lawler | MLive.com)

LANSING, MI -- Businesses who qualify for a jobs incentive could collect up to 100 percent of tax withholding on new employees' jobs under bills introduced in the Michigan Senate this week.

Sen. Jim Stamas, R-Midland, is a leader on the package. He said at a press conference announcing the "Good Jobs for Michigan" package on Thursday it would help Michigan compete with economic incentives in other states.

"We can't afford to sit on the sidelines and have states lure business away that should be coming here," Stamas said.

There are two ways a business could be eligible for the perk. In one scenario, a business would have to create a minimum of 500 new jobs with wages equal to or higher than average in the region of the state where the jobs are located. In the other, a business could create 250 jobs at 125 percent of the average wage in the region and still be eligible.

For the jobs at an equal or higher-than-average wage, the business would be able to keep 50 percent of withholding taxes for 5 years. For the jobs at 125 percent of the average wage, the business could keep 100 percent of the withholding taxes for 10 years.

Up to 15 such agreements could be approved per year, and the state could have $250 million worth out at any given time.

Matthew Gibb, Deputy Oakland County Executive, does a lot of work on business attraction. Right now, he said, Michigan's available incentives aren't cutting it.

"We're simply losing right now," Gibb said.

Specifically, he said, Michigan is competing against states that give things like free land or direct money to businesses.

That was seconded by Jeff Noel of the Whirlpool Corporation, who's been to other states and seen how things operate.

"I know what the incentive war looks like, and we're not even close," he said.

But this package, its proponents claim, would help get Michgian there. And there are steps in the bill to make sure it's not an economic drain -- specifically, a business's proposed expansion or location would have to be "economically sound" and a cost-benefit analysis would have to show that the project would bring an overall positive fiscal impact to the state.

But the package is meeting opposition from the Michigan AFL-CIO. Its president, Ron Bieber, who took issue with the idea of employees subsidizing their own salaries.

"This legislation is a raw deal for Michigan. The idea that a worker would pay their income taxes directly to their employer to subsidize their own salary is just nuts," Bieber said.

"This is really just another example of how Republicans are rigging the economy to favor their corporate donors over regular working people."

A similar measure passed the Senate last year, but stalled in the House.

And it's not the only break the body's eyeing -- the Senate passed a separate package that would give big brownfield projects tax-capturing authority.

The "Good Jobs for Michigan" package is up for its first hearing in Horn's Economic Development and International Investment Committee on Thursday afternoon. It would need to pass the Senate and House and earn a signature from Gov. Rick Snyder to become law.

Note: This story has been updated with comments from the AFL-CIO, a group opposing the legislation.