Michigan Gov. Gretchen Whitmer addressing the state's presidential electors in Lansing Dec. 14. Whitmer said Wednesday that reviving the Good Jobs for Michigan program would help "retain and grow our businesses and create jobs" as the state's economy rebounds from the coronavirus pandemic. (AP Photo/Carlos Osorio)
"It's not a discussion we should be having," Wentworth said when asked about his stance on Whitmer's proposal to use the program to help Michigan's economy attract jobs as it rebuilds from the coronavirus pandemic.
The program, enacted in 2017
, allowed companies that created at least 250 jobs to retain either 50% or 100% of withholding taxes for five to 10 years, depending on the number of jobs created and wages paid. The program was limited to 15 agreements per year and had a total lifetime withholding tax incentive cap of $200 million.During her virtual address, Whitmer touted the program for wooing Pfizer to create 450 jobs by building a manufacturing plant in exchange for a $10.5 million tax break in 2018. When she first announced the renewal initiative on Jan. 19, Whitmer said that plant shipped the first doses of Pfizer's vaccine for COVID-19, the respiratory illness caused by the novel coronavirus.
On Wednesday, Whitmer said renewing the program would help "retain and grow our businesses and create jobs" while Michigan's economy rebounds.
"Passing this legislation will be good for our families, our businesses and our economy," Whitmer said. "Let's get it done."
But Wentworth said that selling a tax incentive package aimed at giving large companies a leg up as part of a pandemic relief effort was "hypocritical talk" and "a slap in the face to small businesses."
The speaker said that while he might be willing to revisit talks on the program after the state's economy is on better footing, it should be shelved for the moment as lawmakers focus on addressing other impacts of the health crisis.
"We can have the discussion later," Wentworth said. "Not as a COVID relief plan."
Shirkey added that lawmakers and Whitmer weren't on the same wavelength for every facet of their COVID-19 recovery initiatives. He said they should negotiate on an economic package "once we arrive at the definition of the problem we're trying to solve."
Whitmer, who is entering the third year of her first term, said during her address that she was committed to finding common ground with lawmakers in the Republican-controlled Legislature. Conservatives have ignored some of her tax proposals since she took office, including her 2019 plan to phase in a 45-cent gas tax increase.
A 2019 bill, S.B. 492, that would have extended the Good Jobs for Michigan program until 2024 never came up for a floor vote. With the program lapsed, Michigan is at a competitive disadvantage with other states that have sizable corporate tax incentive programs to attract large companies, Dan Papineau, director of tax policy and regulatory affairs for the Michigan Chamber of Commerce, told Law360.
"Michigan has no major incentive program on the books currently and until all states unilaterally agree to stop crafting economic development incentives, Michigan must get back in the game in a responsible, accountable and transparent manner," Papineau said. "The Good Jobs program hits these marks and should be put back in our state's economic toolbox."
But the program had its critics. Michael D. LaFaive, senior director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy, a free-market think tank, said in a Jan. 21 blog post that the benefits of bringing large corporations into the state through tax subsidies were oversold.
"These deals sound impressive in headlines, but they account for a miniscule fraction of actual job creation in the state," LaFaive said. "Landing them won't affect job growth in Michigan even if they were worth the cost."
Whitmer's office did not immediately respond to questions from Law360 on Thursday.
--Editing by Robert Rudinger.
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