Legislative Proposals

Analysis:

The story was about state legislation that would provide millions of dollars in tax incentives to businesses in Michigan or those seeking to relocate to Michigan. It is primarily framed as a partisan battle between Republicans and Democrats, with each side making claims about the business tax plans. The story provides no verification of either party’s claims, and only provides actual details of the tax proposal at the end of the article.

You can read at the very end of the story the information about the breakdown of where the tax incentive money would go, such as tourism, filmmakers who film in Michigan and the marketing of the Michigan Economic Development Corp. Then there are details that were left out of the Press version of the AP story which said that “At least $90 million of it must go to the life sciences corridor program over the next two years,” which seems relevant to people in Grand Rapids considering what is happening on Michigan Street hill. Another thing that is missing is the name and number of the actual bill that the House passed. If readers and tax payers wanted to find further information on this legislation they could not find it in the Press article. We checked the Michigan Legislative website and could not find the bill after 10 minutes of searching. Here is how journalists can help citizens, by providing not only a summary of what is happening with state politics, but information that makes it easier for the public to participate in the political process, like actual legislation language or the bill numbers.

Story:

State House OKs business tax relief, Granholm veto possible

AMY F. BAILEY

LANSING, Mich. (AP) — Legislation that would provide tax relief to businesses and invest in up-and-coming industries won state House approval early Thursday morning, but it may not make it past Gov. Jennifer Granholm’s desk.
The legislation does not continue the state’s main business tax beyond its scheduled end on Dec. 31, 2009, which the Democratic governor has said is a requirement for her signature. She said Republicans had agreed to continue it at a reduced rate during recent negotiations.

“It is not good policy to eliminate all business taxes in 2009 and shift the burden to individuals,” Granholm said Wednesday as she pointed to a Senate Fiscal Agency analysis of the economic improvement plan that referred to continuing the single business tax after its scheduled sunset.

A veto, however, would prevent all the bills in the package from becoming law because those that would change the tax code are tied to others that would set up a $1 billion investment fund, said Matt Resch, spokesman for House Speaker Craig DeRoche, R-Novi.

The House vote came 12 hours after lawmakers began session on Wednesday afternoon. They spent much of that time waiting for the legislation to be written.

DeRoche has said the issue of the single business tax sunset did not come up when the deal was hammered out late last week. He said he has always wanted to see the single business tax end and would not have signed off on an agreement that would continue it after four years.

A spokesman for Senate Majority Leader Ken Sikkema, R-Wyoming, questioned whether the governor would veto legislation that would provide what the Senate Fiscal Agency estimates to be nearly $670 million in net tax relief to businesses over the next six years.

“We’re going to call her bluff,” Sikkema spokesman Ari Adler said. “The package she’s going to get will be good for the economy. She’s vetoing tangible relief in favor of a concept.” The Senate was expected to take up the bills later Thursday.

The legislation would set up a $1 billion investment fund to provide loans and grants to new businesses and cutting-edge companies to encourage them to locate in Michigan.

Most of the tax relief and incentives in the package would be directed toward manufacturers. They would see a 15 percent personal property tax credit starting on Jan. 1 as well as a 100 percent credit in 2006 and 2007 if they bring jobs or equipment into Michigan.

House Democrats failed to tack on amendments to bills in the package that would close loopholes in the tax structure. They wanted to remove the scheduled 2009 sunset and increase the minimum wage. When those amendments were voted down, Democrats voted against the tax loophole bills but voted for legislation that would cut taxes and provide incentives to new businesses.

“We’re not going to participate in the tax increases without a full deal,” said House Minority Leader Dianne Byrum, D-Onondaga.

The legislation would drop the single business tax from 1.9 percent to 1.85 percent on Jan. 1, 2009, phase out the tax businesses pay on employer-provided health care benefits over five years and reduce the taxes small businesses pay under the single business tax.

The state would sell some of its future tobacco settlement to put $400 million toward the overall $1 billion investment fund. It also would use $75 million a year from the settlement as that money comes in over the next eight years.

About $100 million of that fund would go toward a variety of economic development initiatives, including $2 million to encourage filmmakers to make movies in Michigan, $15 million for more tourism advertising and up to $36 million for administration and marketing of the Michigan Economic Development Corp., the Senate Fiscal Agency said.

Text from the original article ommitted from the Grand Rapids Press version:

The fund’s remaining $300 million would go to loan guarantees, small business capital access programs and a number of investments, including private equity and venture capital. At least $90 million of it must go to the life sciences corridor program over the next two years.

Selling off some of the state’s future tobacco settlements and using a portion of the annual payments would mean designating $1.4 billion of the state budget for economic development after 20 years, the Senate Fiscal Agency said. That would mean less to spend on other areas, such as corrections and higher education.