Final version of jobs bill is set for vote
by Holly Nelson

LANSING - State legislative leaders and Governor Jennifer Granholm have come to terms on the Jobs Tomorrow legislation, reported Representative Joel Sheltrown on Friday.

"This plan will bring us one step closer to the creation of 500 new high-paying jobs at the former Wurtsmith Air Force Base in Oscoda," Sheltrown said as he praised the governor. "This is a very positive development for Northern Michigan residents.
The jobs bill - previously known as the tobacco stabilization plan, then the Jobs for Michigan bill - has been substantially modified since it was originally authored by Representative Andy Dillon (D-Detroit).

Some of the modifications were made to incorporate potentially beneficial projects. Others were necessary to gain lawmaker support.

The latter category includes business tax cuts sought from the Republican side of the aisle, according to Sheltrown. Some of which will be made up by tax increases in other areas.

The compromise reduces the $1 billion which was to be securitized from the tobacco settlement to $400 million, which is to be put to work the first year making loans and grants toward economic development. A minimum of $90 million will be allocated to the life science corridor program; $299 million will go to the strategic fund board for loan guarantees and to the capital access program; and $101 million to promote such things as defense contracts, automotive technology, tourism and motion pictures.

New wording, specifically sought by Sheltrown, will ensure aircraft maintenance and repair facilities a share of the funding.

An additional $600 million will become available for job creation by taking $75 million a year for eight years from the settlement funds.

The tax cuts, one of which is geared toward enticing the Delphi Corporation to move more of its production to Michigan, includes, among other measures: a reduction in the Single Business Tax from 1.9 to 1.85 percent in 2009; creation of a 15 percent tax credit on the personal property tax, with an acceleration clause which will gradually increase this to 50 percent; and grant a 100 percent personal property tax credit in 2006 and 2007 for jobs/equipment brought to the state from elsewhere.

The tax cuts are to be partially offset by eliminating the sales tax exemptions on prisoner purchases, driver education cars, international phone calls and insurance companies. The small business credit in single business tax will be reduced; there will no longer be a deduction on subsidiary out-of-state gains; liquor fees will double; taxes on commercial rental property will be increased; and there will be higher penalties for tax errors.

Sheltrown said the revised language could be modified further as it is returned to the House of Representatives and Senate at press time. He anticipates the measures will be passed and signed within a week.

"Meanwhile, I'm continuing to lobby every lawmaker I can reach about the program so I can get bipartisan support," Sheltrown said.

The tax cuts, one of which is geared toward enticing the Delphi Corporation to move more of its production to Michigan, includes, among other measures: a reduction in the Single Business Tax from 1.9 to 1.85 percent in 2009; creation of a 15 percent tax credit on the personal property tax, with an acceleration clause which will gradually increase this to 50 percent; and grant a 100 percent personal property tax credit in 2006 and 2007 for jobs/equipment brought to the state from elsewhere.

The tax cuts are to be partially offset by eliminating the sales tax exemptions on prisoner purchases, driver education cars, international phone calls and insurance companies. The small business credit in single business tax will be reduced; there will no longer be a deduction on subsidiary out-of-state gains; liquor fees will double; taxes on commercial rental property will be increased; and there will be higher penalties for tax errors.

Sheltrown said the revised language could be modified further as it is returned to the House of Representatives and Senate at press time. He anticipates the measures will be passed and signed within a week.

"Meanwhile, I'm continuing to lobby every lawmaker I can reach about the program so I can get bipartisan support," Sheltrown said.

Sheltrown and other area lawmakers are counting on the program to secure about $25 million for the construction of two new hangars at the Oscoda-Wurtsmith Airport.

As proposed, the hangars would be used by Kalitta Air for wide-bodied aircraft maintenance and repairs for its own and other fleets. Kalitta officials estimate such facilities would create a minimum of 500 new jobs, with Sheltrown and Dillon projecting additional job creation with the development of ancillary industry and training programs.