Congress, Legislature Kick Off Fall Session: Reauthorization, Jobs Plan and E-Verify Among Bills Under Consideration
Summer has ended and the Michigan Legislature and Congress is back in session. There are a number of issues facing the state legislature this fall. The governor is making final preparations for a proposal to reform parts of the health care system. Policymakers are looking at ways to eliminate the Personal Property Tax. Gov. Snyder is also diligently preparing for the much-awaited special message to the legislature on infrastructure at the end of October. That message is expected to include recommendations for new investment both in roads and bridges as well as new incentives for communities to invest in water and sewer systems.
Bill Requires Government to E-Verify New Employees
Legislation pending in the state House (HBs 4024 and 4026) would require government contractors to run their new employees through the federal E-Verify database to ensure their employment eligibility. The E-Verify system is free of charge and requires only a name and social security number and a few seconds to determine employee eligibility.
Proponents of the legislation argue that contractors who already play by the rules will be able to compete more fairly against companies who currently hire illegal workers. Opponents of the legislation say that government should not impose new regulations on businesses and if a new requirement is created, it should be done nationally as opposed to by each individual state. They also argue that although the error rate is only around one percent, it is still too high to use on any significant basis.
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Extension of Transportation and FAA Bill Close at Hand
House and Senate leadership have been working late into the evenings in order to reach a deal to extend both SAFETEA-LU (highway bill) and the FAA authorization, according to a key MITA source, Mike Henry of the Alpine Group. It appears that policymakers’ efforts to reach a deal were successful, as this week the House passed a highway bill extension through March 2012 and an FAA extension through January 2012.
The annualized funding level contained within the highway bill’s extension is expected to be just under $40B – compared to the current annual spending level of $43B. In contrast to proposed cuts of over 30 percent, the funding levels of the short-term extension should be considered a victory.
Obama Proposes Jobs Plan
President Obama’s Jobs Bill is currently being debated in Washington. Below are some details that are known so far of the $447 billion plan:
Payroll tax cuts – total cost = $240 billion (more than half of the total package)
Employees would pay 3.1% on their first $106,800 of wages into Social Security (currently paying a reduced rate of 4.2% that is set to expire at the end of the year)
The proposal would cut the payroll tax businesses pay in half to 3.1% on the first $5 million in wages.
All payroll taxes will be waived if businesses hire a new worker or give a worker a raise.
$8 billion in tax credits would be granted to companies that hire workers who have been unemployed for six months or more and $5 billion in tax incentives for companies to invest in equipment and plants.
Infrastructure Bank – $10 billion - after an initial round of funding, funding would be available to provide loans to give private-sector projects funds for transportation and infrastructure related projects. Projects that would receive funding would be based on "how badly a construction project is needed and how much good it would do for the economy.”
Surface Transportation - $50 billion – immediate funding will be made available for highway, transit, rail and aviation projects.
School Modernization - $25 billion – funding will be made available to "modernize" 35,000 public schools in addition to $5 billion for improving community colleges.
Long-term unemployed – new tax credit of up to $4,000 for business that hire workers who have been out of a job for over six months.