Michigan GOP’s reign in Legislature ends with a whimper: No spending deal

• Gov. Gretchen Whitmer, Legislature failed to finalize spending deal
• Republicans blamed Whitmer, but Democrats denied claims
• Democrats will take over the Legislature next year

LANSING — An abbreviated lame-duck session ended with little action late Wednesday, as a potential spending deal between Gov. Gretchen Whitmer and the Michigan Legislature collapsed.

House Republicans blamed the Democratic governor, claiming Whitmer "reneged" a deal that would have put $200 million into a business incentive program she requested in exchange for a GOP-backed tax code change.

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Democrats disputed that, and Whitmer had already signaled that she did not expect GOP leaders to agree to her top priorities during their final day in session. 

"I'll wait until next year," Whitmer told Bridge Michigan on Wednesday afternoon, looking toward next term when Democrats will control both chambers of the state Legislature for the first time in four decades. 

Michigan has a multi-billion dollar surplus. Whitmer had asked for a deposit of money into the Strategic Outreach and Attraction Reserve (SOAR) Fund, a business incentive program she created with the GOP-led Legislature in order to lure business investments in the state. 

State Rep. Matt Hall, a Marshall Republican who is poised to become House Minority Leader next year, said lawmakers were prepared to put an additional $200 million into SOAR Fund for a "major" project that could create "hundreds" of jobs. 

Hall didn’t offer specifics, but fellow Republican Rep. Beau LaFave said the investment would have been in Delta County in the Upper Peninsula and created “stable, well-paying jobs.”

In exchange, Hall said Republicans wanted Whitmer to sign a bipartisan bill that would have ensured the state could require businesses to pay sales tax on delivery and installation services. 

Michigan does not impose its 6 percent sales tax on services, but the state has been "illegally" charging for delivery and installation, Hall argued. The legislation would amend the statutory definition of "sales price" and "purchase" price to exclude any delivery or installation charges.

The failed deal would have been a ‘win-win” for the economy, Hall said, noting that while Democrats will control the House and Senate next year, bipartisan cooperation will still be important because they’ll only have two-seat majorities in each chamber. 

"We've got to be able to honor our word, and we've really got to work together and trust each other," he told reporters around 10:30 p.m. "This is something that is really setting that back."

Whitmer's office, in a statement, said she remains willing and ready to “work with anyone who’s serious about solving problems and getting things done that will make working families' lives better right now."

Outgoing Senate Appropriations Chairman Jim Stamas, R-Midland, declined to assign blame.

"It went back and forth on multiple different items and just didn't work out," he told reporters, according to Gongwer News Service. 

The stalemate capped a lengthy day in the Legislature, as outgoing legislators delivered a series of farewell speeches -- including an apocalyptic warning of impending “one world government” from Senate Majority Leader Mike Shirkey, R-Clarklake — while waiting for a potential deal.

Earlier Wednesday, the House Appropriations gave final approval for the Whitmer administration to use $60 million in existing money from the SOAR Fund to support construction of a pipeline from a Muskegon County wastewater facility to Coopersville in Ottawa County. 

That previously announced project, part of a state site readiness program, is expected to create 145 jobs by adding wastewater capacity for five expanding agribusinesses: Fairlife, Continental Dairy, DeVries Meats, Applegate Dairy, and Swanson Pickle.

The Michigan Strategic Fund approved the grant in October, a move applauded by Whitmer and several local Republican legislators. 

Wednesday's committee vote allowed the pipeline project to move forward but did not allocate any new money to the business incentive program. 

Early Thursday morning, the Michigan House also gave final approval to a package of bills to overhaul the state's recycling laws despite environmental group opposition to a last minute change. That legislation is now heading to Whitmer’s desk for potential signature.