Michigan GOP lawmakers: Whitmer 'reneged' on $200M incentive, tax cut deal

Gov. Gretchen Whitmer and Michigan's Republican majorities in the House and Senate failed to come to terms at the end of this year's legislative session on a late-night deal to provide hundreds of millions in taxpayer dollars for another potentially massive economic development project.

Soon-to-be House Minority Leader Matt Hall, R-Comstock Township, said late Wednesday there was a deal to send $200 million to a state fund created to entice businesses to stay in or relocate to Michigan. As part of the deal, Republicans wanted to do away with a specific business-related tax.

Ultimately, Hall said, the Whitmer administration opted not to go through with the plan. A leading Senate Democrat and the administration pushed back on that assertion.

"We had a great deal with the governor, the governor reneged, so we're not going to have a (funding bill)," Hall said.

"There's a major economic development project in our state. We were ready to allocate a couple hundred million dollars for this. It would have created hundreds of jobs. And we were looking to get done a tax cut."

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Republicans wanted to do away with collecting sales and use taxes on "delivery and installation" services, something they've advocated throughout the year.

Whitmer backed out of the deal about an hour after everyone reached agreement Wednesday evening, Hall said. Sen. Aric Nesbitt, R-Lawton, and GOP leader of the Senate next session, echoed those comments.

“There was bipartisan support behind this. It would have helped workers and families across Michigan as our state looks to compete. It leaves one to wonder how much is going to get done to bring jobs to our state going forward when Gov. Whitmer changes her mind at the eleventh hour," he said in a statement.

Departing state Sen. Curtis Hertel, D-Lansing said both lawmakers are characterizing what happened inaccurately. Although he acknowledged he was not part of negotiations and there were conversations about a deal, he said it was inaccurate to characterize what happened as the governor backing out of an agreement.

"I don’t think there was a deal that was ever in place, and I don’t think there can ever be a deal without my caucus being part of it. And certainly that never happened either," Hertel said just after midnight Thursday.

"These last session days are certainly tough, attempts were made, but I think anyone at this point saying a deal was in place is just not being accurate."

In a statement, Whitmer communications director Bobby Leddy did not directly refute Hall's comments but suggested there's time for deals with new legislative leaders in the future.

"Gov. Whitmer is always ready to work with anyone who's serious about solving problems and getting things done that will make working families' lives better right now. Over the last four years, she successfully brought together Republicans and Democrats to pass numerous historic pieces of legislation that cut taxes, put money back into people’s pockets, and made our state a competitive place to do business again, while landing more than 10,000 new jobs in the process," Leddy said.

"In less than a month, an entirely new legislature will be seated after Michiganders voted to change leadership, and we look to tackle this and more with new lawmakers in the new year.”

The collapsed deal reflects broader failures to create deals — or a lack of incentive to do so — during the so-called lame duck legislative session, the final days when lawmakers retiring or otherwise leaving service still retain their seats.

In general, Whitmer should have a path to any number of legislative deals when lawmakers return to Lansing in January, with Democrats taking control of both the House and Senate. Previous economic development deals garnered a modicum of legislative scrutiny but generally passed with sweeping bipartisan support. However, Hall suggested Whitmer would likely need Republicans to get such projects approved in a Legislature where Democrats hold slim majorities.

"We're entering a new time, where we're gonna have a 56-54 House, and a close margin in the Senate, and bipartisan dealmaking is going to be at a premium. And so we've got to be able to honor our word and we got to be able to work together and trust each other. And so I'll just say this is something that really is setting that back," Hall said.

"When the governor backed out, that's setting us back and it creates questions about how we're going to build that trust and work together over the next two years."

Hall did not immediately provide details about the company or industry involved in the proposed project. In a statement early Thursday, Rep. Beau LaFave, R-Iron Mountain, suggested the project was supposed to be slated for Delta County in the Upper Peninsula.

Earlier Wednesday, frequently outspoken Rep. Matt Maddock, R-Milford, took to Facebook to say he would be "voting no on a bill to give China 175 millioncash to build a battery plant."

In the fall, the state allocated $715 million in incentives for Gotion Inc., a Chinese manufacturer of electric vehicle batteries, as part of a plan for the company to invest $2.4 billion to build a new plant in the Big Rapids area.

House lawmakers did approve a much smaller funding request, for a project already announced earlier this year. The House Appropriations Committee voted in support of a roughly $60 million incentive created by the Michigan Economic Development Corporation for a wastewater expansion project to assist small businesses and residents in Muskegon and Ottawa counties.

The committee overwhelmingly approved funding for the project on a bipartisan vote. Democrats and Republicans from the region heralded the decision, noting that unlike other funds allocated through the MEDC, this money did not go to a specific company.

"This is not handing money to a new business, this not handing money to a business that says, 'If you do this I'll create jobs, even though I might cancel jobs later,'" said Rep. Bradley Slagh, R-Zeeland.

"This is doing the right stuff and setting up businesses to grow if they want to."

The Senate already approved the funding.

'Burning hot garbage'

The Senate and House took up a series of bills related to waste and recycling. While the original bipartisan measures aimed to increase the frequency of recycling in the state, Senate lawmakers amended two of the bills in a way that garnered immediate pushback from a handful of Democrats.

Sen. Rosemary Bayer, D-Keego Harbor, lamented the changes, saying they shifted beyond the focus of the measures and opened the door to manufacturing burning plastic. Sen. Jeff Irwin, D-Ann Arbor, put it more bluntly.

"These bills are burning hot garbage," Irwin said, noting it's both how he felt about the bill and what the new legislation would allow people to do.

"I would just ask you before you vote on this legislation to think about the people downwind from the burning hot garbage. What is it that they're going to have to breathe?"

The measures — both those amended and others in the broader legislative package — still passed the Senate easily, with bipartisan support. The House also approved the measures.

Contact Dave Boucher at dboucher@freepress.com or 313-938-4591. Follow him on Twitter @Dave_Boucher1.

This article originally appeared on Detroit Free Press: Michigan GOP, Whitmer can't make deal on $200M incentive, tax cut